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2000

PROCEDURES OF SHANGHAI MUNICIPALITY ON THE ADMINISTRATION OF JOINT OPERATION OF SCHOOLING IN SHANGHAI BY INSTITUTIONS AND INDIVIDUALS FROM OUTSIDE MAINLAND CHINA

Procedures of ShangHai Municipality on the Administration of Joint Operation of Schooling in ShangHai by Institutions and Individuals
from Outside Mainland China

CHAPTER I GENERAL PROVISIONS CHAPTER II ADMINISTRATION OF THE SETTING UP OF JOINT OPERATION OF SCHOOLING CHAPTER III ADMINISTRATION
OF JOINT OPERATION OF SCHOOLING CHAPTER IV LEGAL LIABILITY CHAPTER V SUPPLEMENTARY PROVISIONS

Article 1 These Procedures are enacted, in accordance with the relevant provisions of the State and in the light of the specific circumstances
in Shanghai, for the purpose of strengthening the administration of joint operation of schooling in Shanghai by institutions and
individuals from outside mainland China.

Article 2 The term “joint operation of schooling by institutions and individuals from outside mainland China” (hereinafter referred to as Joint
Operation of Schooling) used in these Procedures refers to the operation of schooling for officially recognized education and non-
officially-recognized education, except compulsory education, by institutions and individuals from outside mainland China with domestic
institutions through co-investment or other forms of cooperation, and jointly taking part in teaching and management.

The term “institutions and individuals from outside mainland China” refers to any institutions and individuals except religious institutions
and clergymen from outside mainland China.

The “officially recognized education” mentioned in Section 1 of this Article refers to the education for which the certificate of
formal schooling or the certificate of academic degree recognized by the Chinese Government shall be issued.

Article 3 The joint operation of schooling shall abide by the laws, regulations and rules issued by the People’s Republic of China, and meet
the basic requirements of the educational quality stipulated by the government.

The legal rights and interests of the coordinators in the joint operation of schooling shall be protected by the law.

Article 4 The Shanghai Municipal Education and Labor Administration Departments shall be in charge of the unified administration of joint operation
of schooling.

The District or County Education and Labor Administration Departments shall be in charge of the administration of joint operation
of schooling in their respective regions according to one’s own responsibility.

Article 5 The jointly operated school shall accept the supervision, inspection, guidance and appraisal of the education and labor administration
departments.

CHAPTER II ADMINISTRATION OF THE SETTING UP OF JOINT OPERATION OF

Article 6 Application for joint operation of schooling shall meet the following requirements:

1. To define the form of cooperation that shall be conducted by Chinese and foreign coordinators;

2. To set up a board of directors with its chairman and directors determined; no less than half of the board members shall come from
the Chinese side;

3. To have Chinese citizens act as the legal representative and the president of the jointly operated school;

4. To have the personnel who is familiar with the professional work of education and management of school take charge of the daily
work of the school;

5. To have a faculty of full-time and part-time teachers who meet the State requirements on formal schooling and are competent in
teaching, and to have the number of teachers shall match the scope of education offered;

6. To have definite plans for operating the school, for teaching, and for selecting teaching materials;

7. To have the teaching sites and facilities that meet the requirements of running a school; and

8. To have necessary funds for starting the school and financial resources to guarantee the normal operation of regular teaching
activities.

Joint operation of schooling for higher education shall, in addition to the requirements mentioned in the previous paragraphs, meet
the basic requirements stipulated in the “Provisional Regulations for Setting Up Ordinary Schools for Higher Education.”

Article 7 When applying for joint operation of schooling, the applicant shall submit the following documents:

1. The project proposal and the feasibility study report;

2. The written opinions of the department in charge of the Chinese coordinator;

3. The identification certificates of both coordinators;

4. The credit certificate on the funds for operating the school; and

5. The letter of intention on cooperation and the plan for running the school.

Article 8 Applicants for joint operation of schooling shall go through the procedures for examination and approval according to the following
provisions:

1. The applicant with the intention to set up a school for officially recognized higher education, except the officially recognized
education for senior technicians, shall apply to the Municipal Education Administrative Department. After receiving the application,
the Municipal Education Administrative Department shall organize Shanghai Municipal Reviewing Committee for the Establishment of
Higher Education to appraise the application. If the application has been approved by the Committee, the Municipal Education Administrative
Department shall then submit the application to the Shanghai Municipal people’s Government for examination and approval. If the application
involves undergraduate and graduate courses, the Municipal People’s Government shall submit the application to the State Education
Administrative Department for approval after the examination.

2. The applicant with the intention to set up a school for officially recognized intermediate education, except the officially recognized
education for technicians, shall apply to the Municipal Education Administrative Department. The Municipal Education Administrative
Department shall make a decision within 15 days after receiving the application.

3. The applicant with the intention to set up a school for higher and intermediate education for technicians shall apply to the Municipal
Labor Administrative Department. The Municipal Labor Administrative Department shall make a preliminary decision within 15 days after
receiving the application. If it has been approved, the Municipal Labor Administrative Department shall submit the application to
the Municipal Education Administrative Department for examination and approval. The Municipal Education Administrative Department
shall make a final decision within 15 days after receiving the preliminary decision.

4. The applicant with the intention to set up a school for non- officially-recognized education, except pre-school education, shall
apply to the relevant education and labor administration departments according to the relationship of subordination, who shall make
a preliminary decision within 15 days after receiving the application and submit the approved application to the Municipal Education
Administrative Department or the Municipal Labor Administrative Department for examination and approval. The Municipal Education
Administrative Department and the Municipal Labor Administrative Department shall make a final decision within 15 days after receiving
the preliminary decision and the Municipal Labor Administrative Department shall report its case to the Municipal Education Administrative
Department for the record.

5. The applicant with the intention to set up a school for pre-school education shall apply to the District or County Education Administrative
Department in the respective locality, who shall make a preliminary decision within 15 days after receiving the application. If it
has been approved, the application shall be submitted to the Municipal Education Administrative Department for examination and approval.
The Municipal Education Administrative Department shall make a final decision within 15 days after receiving the preliminary decision.

Article 9 After the project of joint operation of schooling has been approved, both parties shall make ready the funds, buildings, facilities
and personnel necessary for the running of school, and shall submit to the original approval department a formal application for
setting up the school, together with the following documents.

1. the cooperation contract signed by the Chinese and foreign coordinate parties and the Articles of the school;

2. The name list of the board members and the senior administrative staff of the school;

3. The teaching curricula and the plan for selecting teaching materials; and

4. The certificate of using the teaching buildings.

Within one month after obtaining the approval from the original approval department for setting up the school, the coordinate parties
shall go through the procedures for registration with the education or labor administration departments designated by the original
approval department. The school can only be legally opened after registration.

CHAPTER III ADMINISTRATION OF JOINT OPERATION OF SCHOOLING

Article 10 The jointly operated school shall sign the engagement contract with the teaching and administrative staff. The Municipal Education
Administrative Department shall, together with the relevant departments, formulate specific provisions concerning the recruitment,
dismissal and resignation of the teaching and administrative staff and their salaries, welfare benefits, labor insurance, pension
insurance and unemployment insurance.

Article 11 All kinds of jointly operated schools for officially recognized education shall, after registration, submit their plans of enrollment
to the education administration department designated by the original approval department for approval, and they can conduct enrollment
only after obtaining approval.

Article 12 The enrollment, entrance examination and admission of the jointly operated schools for officially recognized higher education shall
abide by the relevant provisions formulated by the Municipal Education Administration Department.

Article 13 Jointly operated schools for officially recognized education shall set their main curricula and teaching hours by referring to the
requirements on the curricula and teaching hours of the state-run schools of the same level and the kind. The teaching materials
used must be examined and approved by the Municipal Education Administration Department.

Article 14 Without authorization, the teaching buildings and facilities of the jointly operated school shall not be diverted for other use.

The start-up funds of the school, the tuition fees collected from students and the funds (equipment included) raised abroad in the
name of the jointly operated school must be used as expenditures against budgeted items or as the school funds, and may not be diverted
for other use or transferred out of mainland China.

Article 15 Religious dissemination in any form is not allowed in jointly operated schools.

Article 16 Specific provisions on the administration of foreign currency and the opening of accounts in RMB and foreign currency shall be separately
formulated by the Municipal Education Administrative Department together with the State Administration of Foreign Exchange, Shanghai
Branch.

Article 17 The entry and exit from the territory of the People’s Republic of China of the foreign coordinators in the jointly operated school
or of the foreign faculty members engaged by the school shall be dealt with in accordance with the provisions of the Law of the People’s
Republic of China on Entry and Exit of Aliens.

Article 18 The standard of tuition charged by the jointly operated school shall be set as stipulated by Shanghai Pricing Bureau and Shanghai
Finance Bureau.

Article 19 The teaching equipment brought into China by the foreign coordinator, which is to be exempted from customs duties, shall be handled
in accordance with the relevant rules of General Customs Administration.

Article 20 For the termination or cancellation of the jointly operated school, the applicant shall, with the plan for dealing with the aftermath
and the inventory of the property of the school, apply to the original education or labor administration department who accepted
the application for setting up the school; and the latter shall, after the preliminary examination, submit the application to the
original approval department for approval.

Article 21 After receiving the application for termination or cancellation of the jointly operated school, the relevant education and labor
administration departments shall liquidate the assets of the school and appoint the finance and audit departments to audit the financial
status of the school. The remnant property of the school, except the part that is to be returned to the foreign coordinator according
to the contract stipulation, shall be returned to the Chinese coordinator.

Article 22 Acts in violation of these Interim Procedures shall be penalized by the education or labor administrative department at different
levels according to the following provisions:

1. The jointly operated school set up without authorization shall be ordered to correct its fault within a specified period, and
to return their illegal gains;

2. The school which enrolls students without authorization from the approval department shall be ordered to correct its fault within
a specified period;

3. The school which is poorly managed and its education and teaching quality does not meet the required standard shall be ordered
to correct its fault within a specified period; in case of serious violation, it may be ordered to stop enrollment;

4. The school which diverts its building, funds and equipment for other use without authorization shall be ordered to correct its
fault within a specified period; in case of serious violation, it may be ordered to stop enrollment;

5. The school that does not issue certificates of formal schooling in accordance with the stipulations of the State shall be ordered
to correct its fault within a specified period; in case of serious violation, it may be ordered to stop enrollment; or

6. The school which is engaged in religious dissemination in any form shall be ordered to correct its fault within a specified period;
in case of serious violation, it may be ordered to stop enrollment.

Article 23 In meting out administrative punishment, the competent education and labor administrative departments shall issue a notification
of decision about the administrative punishment. In collecting the punished fines, unified receipts of the punished fines or confiscated
properties printed by the Municipal Finance Department shall be issued.

All the fined or confiscated income shall be turned over to the State Treasury.

Article 24 If the party concerned does not accept the administrative act taken by the competent education and labor administration department,
the party concerned may apply for administrative reconsideration or bring an administrative suit in accordance with the Regulations
on Administrative Review and the Administrative Litigation Law of People’s Public of China. If the party concerned has neither applied
for reconsideration against administrative sanction nor brought a suit within the legal time limit, the relevant education and labor
administration department may apply to the people’s court for compulsory enforcement.

CHAPTER V SUPPLEMENTARY PROVISIONS

Article 25 Specific provisions on the joint operation of the school that enrolls only the children of foreigners stationed in Shanghai shall
be formulated separately.

Specific implementation rules for jointly operated schools in the Pudong New Area shall be formulated separately.

Article 26 Shanghai Municipal Education Administrative Department is responsible for the interpretation of the application of these Interim
Procedures.

Article 27 These Interim Procedures shall become effective on March 1, 1994.

MOFTEC P.R.C.

EDITOR:Victor

PROCEDURES OF SHANGHAI MUNICIPALITY ON THE ADMINISTRATION OF BROKERS

Procedures of Shanghai Municipality on the Administration of Brokers

CHAPTER I GENERAL PROVISIONS CHAPTER II REGISTRATION CHAPTER III NORMS OF INTERMEDIARY ACTIVITIES CHAPTER IV LEGAL LIABILITY CHAPTER
V RESOLVING OF DISPUTE CHAPTER VI SUPPLEMENTARY PROVISIONS

Article 1 Purpose and Basis

With a view to promoting the development of socialist market economy, normalizing the activities of brokers, and protecting the legitimate
rights of the parties concerned, these Procedures are formulated in accordance with the relevant provisions of laws, rules and regulations,
and by incorporating the actual situation of this Municipality.

Article 2 Definition

The broker, referred to in these Procedures, is an individual person or organization that earns commission by rendering brokerage
services, as requested by the principal, of providing information, opportunity, terms of concluding a contract, or act as an intermediary
to conclude a contract for the principal with the counterpart.

The broker, who acts as agent at the request of the principal, or with the authorization of principal, shall exercise rights and assume
duties pursuant to the relevant provisions of laws, rules and regulations.

Article 3 Criterion of Intermediary Activities

The broker who undertakes brokerage activities shall follow the principle of voluntary participation, fair, equal in value and compensated,
and good faith.

Article 4 Scope of Brokerage Service

The brokers can undertake the intermediary activities in all sorts of commodity, technological trade, and other commercial sectors.

Where laws, rules and regulations provide otherwise on the intermediary activities of the brokers, the provisions of such laws, rules
and regulations shall prevail.

Article 5 Supervision Organization

The industrial and commercial, financial and tax, price control, audit and other relevant administrative departments of this municipality
shall assume the responsibilities in supervising and controlling the intermediary activities of brokers.

Article 6 Registration

The individual person and organization shall apply with industrial and commercial administrative department and undertake the intermediary
services after registration is made and business license is granted.

Article 7 Requirements for Individual Applicants

The individual person who applies for undertaking intermediary activities shall meet the following requirements:

1. Reaching the age of 18 and is entirely capable of civil action;

2. Having not been prosecuted for any criminal liability in recent 3 years; and

3. Possessing specified amount of fund or property as a security.

Article 8 Materials to be Submitted by Individual Applicants

The individual person who applies for undertaking intermediary activities shall submit the following documents to the industrial and
commercial administrative department:

1. Household register and identification papers;

2. Notarial certificate showing that the individual person has not been prosecuted in the recent 3 years;

3. Certificate evidencing the surety with fund or property; and

4. Other necessary certificates or materials.

The individual person who applies for undertaking intermediary activities in special industries stipulated by laws, rules and regulations
shall present appropriate qualification documents or certificates.

Article 9 Partnership Brokerage Organization

The broker organization may be set up in the form of partnership.

The liabilities of a partnership broker organization shall be assumed by each partner according to their capital contribution ratio
or terms and conditions in partnership agreement with their own property for satisfaction of debts. The partners shall assume unlimited
joint liability of the partnership organization.

Article 10 Requirements for Broker Organization as a Legal Person

The broker organization that meets the following requirements can become the corporate legal person of limited liabilities:

1. Having registered capital of more than RMB 100,000;

2. Having a certain number of professionals with appropriate qualifications; and

3. Meeting other necessary requirements specified by the laws, rules and regulations.

The broker organization of limited liability shall assume its liabilities with all its assets.

Article 11 Documents to be Submitted for Establishing Broker Organization

Those who apply to establish broker organization shall submit the following written materials to the industry and commerce administrative
departments:

1. Application;

2. Name and address of broker organization;

3. Articles of association or partnership agreement;

4. The name(s), resume(s) and other relevant certificates of the chief responsible person or partners of the broker organization;
and

5. Capital verification certificate.

To apply for the establishment of a brokerage organization that is required by the laws, rules and regulations to be examined and
approved by other relevant departments, the broker organization shall submit relevant approval documents along with the application.

CHAPTER III NORMS OF INTERMEDIARY ACTIVITIES

Article 12 Intermediary Service Contract

When the broker accepts business, an intermediary service contract between the broker and the principal shall be signed and the services
shall be rendered according to the intermediary service contract.

Article 13 Contents of Intermediary Service Contract

The intermediary service contract between the broker and the principal shall include the following:

1. Intermediary service items;

2. Requirements or standards in rendering intermediary services;

3. Amount of commission, mode of payment and payment terms;

4. Time limit of performance;

5. Default liabilities and ways in resolving the dispute; and

6. Other important items agreed upon by the parties to the contract.

Article 14 Forbidden Acts

The broker shall provide intermediary services based on the facts known to him/her, and shall not do the following acts:

1. Providing intermediary services when the broker knows that the principle is not capable of performing the contract;

2. Offering false information or illusory situations to the detriment of the principle;

3. Maliciously conspiring with others against the principal’s interest; or

4. Other activities in violation of the principle of good faith.

Article 15 Conditions Required for Earning Commission

If the intermediary service contract concluded between the broker and the principal specifies the contents of the intermediary services
to be the providing information, opportunity and conditions for concluding a contract, the broker may demand the principal for commission
after performing the intermediary service contract.

If the intermediary service contract concluded between the broker and the principal specifies the contents of the intermediary services
of concluding a contract with a counterpart by acting for the principal, the broker shall not demand the principal for payment of
commission before the conclusion of the contract between the principal and the counterpart.

Article 16 Expenses Involved in Intermediary Activities

If the broker and the principal have not agreed upon the expenses involved in the intermediary activity beforehand, the broker shall
not ask the principal to bear the expenses involved in the intermediary activities.

Article 17 Situations of Nonrefundable Commission

After the conclusion of contract between the principal and the counterpart through the broker as an intermediary for the contract,
the broker needs not refund the commission in any one of the following situations:

1. During the process of intermediary service, the broker discovers that the principal or the counterpart is unable to perform the
contract, and persuades the party concerned not to enter into a contract, nevertheless the party concerned does not accept the advice;
or

2. The broker provides intermediary service according to facts, but the party to the contract breaches the contract after the principal
and the counterpart conclude the contract.

Article 18 Situation Where No Commission and Intermediary Activity Fee Is Obtainable

The broker shall not demand the principal for payment of commission nor bear the expenses for intermediary activities, if the broker’s
intermediary activities run counter to his/her obligations and infringe upon the principal’s interest.

Article 19 Situation Where No Obligation Exist to Make or Accept Payments

The broker shall not have the obligation to make or accept payments under the contracts concluded between the principal and the counterpart
where the broker acted as the intermediary for the conclusion of the contract.

Article 20 Undisclosed Agency

The broker has the obligation of not disclosing the name of the principal to the counterpart should he/she be required to undertake
undisclosed intermediary activities by the principal and has agreed to do so.

In the foregoing case, the broker shall, before the principal concludes the contract with the counterpart, stipulate in his/her intermediary
contract with the principal that the principal shall assume full responsibility for the broker’s acts done in accordance with the
intermediary service contract.

An individual broker and a partnership broker organization shall not conduct undisclosed intermediary activities.

Article 21 Broker’s Breach of Contract

The following acts of the broker shall be regarded as acts of breach of contract:

1. Undertaking intermediary activities beyond the scope agreed upon in the intermediary service contract and without subsequent affirmation;

2. Undertaking intermediary activities beyond the validity period of the intermediary service contract and not subsequently affirmed
by the principal; or

3. Acts in violation of any other terms and conditions agreed upon in the intermediary service contract.

Article 22 Principal’s Breach of Contract

The following acts of the principal shall be regarded as acts of breach of contract:

1. Failure to pay commission or intermediary service expenses as per the intermediary service contract when the broker starts to perform
the contract;

2. Interfering with the intermediary activities or delay in entering into a contract with the counterpart without any justified reason
when the principal has agreed to conclude a contract with the counterpart after intermediary activities;

3. Unauthorized alteration of the terms and conditions of the intermediary service contract without the broker’s consent; or

4. Acts in violation of other terms and conditions in the intermediary service contract.

Article 23 Civil Liability

Any act in violation of Articles 14, 20, 21 and 22 to the detriment of others’ interest shall be liable for damages according to law.

Article 24 Administrative Penalty

In case a broker does any one of the following acts, the administrative department of industry and commerce shall give a warning and
impose a fine of not more than RMB 2,000, or if the wrongful act is serious, between not less than RMB 2,000 and not more than RMB
30,000:

1. Rendering intermediary service with the knowledge that the principal is unable to perform the contract;

2. Offering false information or illusory facts to the detriment of the principal;

3. Conspiring maliciously with others to the detriment of the principal; or

4. Other acts that run counter to the principle of good faith.

Article 25 Criminal Liability

The broker offers intermediary service not based on real facts, and the case is serious, the judicial organs may prosecute the directly
liable person or the legal representative for his/her criminal liability.

Article 26 Ways of Resolving Disputes Over Intermediary Service Contract

Disputes over the intermediary service contract between the broker and the principal shall be resolved through consultation or mediation.
In case the parties concerned are not willing to resolve through consultation and mediation, or they fail to settle the dispute through
consultation and mediation, an application can be made to the arbitration organization in compliance with the arbitration clause
in the brokerage contract or a written arbitration agreement subsequently reached. If the parties concerned fail to put an arbitration
clause in the intermediary service in the contract or fail to reach subsequently an arbitration agreement, they may bring an action
in the people’s court.

Article 27 Administrative Review and Administrative Litigation

If the party concerned does not accept the administrative penalty, he/she may apply for an administrative review or bring an administrative
action according to the Regulations on Administrative Review or the Administrative Litigation Law of the People’s Republic of China.

CHAPTER VI SUPPLEMENTARY PROVISIONS

Article 28 Broker Profession Society

Brokers may organize a broker society on the voluntary basis, and shall register with relevant department in accordance with the law
for the establishment of such society.

Article 29 Interpretation Department

The Shanghai Municipal Industry and Commerce Administration shall be responsible for the interpretation of these Procedures in specific
applications.

Article 30 Date of Implementation

These Procedures shall become effective on October 1,1994.

LABOUR LAW OF THE PEOPLE’S REPUBLIC OF CHINA

The Standing Committee of the National People’s Congress

Order of the President of the People’s Republic of China

No.28

The Labour Law of the People’s Republic of China which has been adopted at the Eighth Meeting of the Standing Committee of the Eighth
National People’s Congress on July 5, 1994 is promulgated now, and shall enter into force as of January 1, 1995.

President of the People’s Republic of China Jiang Zemin

July 5, 1994

Labour Law of the People’s Republic of China ContentsChapter I General Provisions

Chapter II Promotion of Employment

Chapter III Labor Contracts and Collective Contracts

Chapter IV Working Hours, Rest and Vacations

Chapter V Wages

Chapter VI Occupational Safety and Health

Chapter VII Special Protection for Female and Juvenile Workers

Chapter VIII Vocational Training

Chapter IX Social Insurance and Welfare

Chapter X Labor Disputes

Chapter XI Supervision and Inspection

Chapter XII Legal Responsibility

Chapter XIII Supplementary Provisions

Chapter I General Provisions

Article 1

This Law is formulated in accordance with the Constitution in order to protect the legitimate rights and interests of laborers, readjust
labor relationship, establish and safeguard a labor system suited to the socialist market economy, and promote economic development
and social progress.

Article 2

This Law applies to all enterprises and individual economic organizations (hereinafter referred to as employing units) within the
boundary of the People’s Republic of China and laborers who form a labor relationship therewith.

State organs, institutional organizations and societies as well as laborers who form a labor contract relationship therewith shall
follow this Law.

Article 3

Laborers shall have the right to be employed on an equal basis, choose occupations, obtain remuneration for their labor, take rest,
have holidays and leaves, obtain protection of occupational safety and health, receive training in vocational skills, enjoy social
insurance and welfare, and submit applications for settlement of labor disputes, and other rights relating to labor as stipulated
by law.

Laborers shall fulfill their labor tasks, improve their vocational skills, follow rules on occupational safety and health, and observe
labor discipline and professional ethics.

Article 4

The employing units shall establish and perfect rules and regulations in accordance with the law so as to ensure that laborers enjoy
the right to work and fulfill labor obligations.

Article 5

The State shall take various measures to promote employment, develop vocational education, lay down labor standards, regulate social
incomes, perfect social insurance system, coordinate labor relationship, and gradually raise the living standard of laborers.

Article 6

The State shall advocate the participation of laborers in social voluntary labor and the development of their labor competitions and
activities of forwarding rational proposals, encourage and protect the scientific research and technical renovation engaged by laborers,
as well as their inventions and creations; and commend and award labor models and advanced workers.

Article 7

Laborers shall have the right to participate in and organize trade unions in accordance with the law.

Trade unions shall represent and safeguard the legitimate rights and interests of laborers, and independently conduct their activities
in accordance with the law.

Article 8

Laborers shall, through the assembly of staff and workers or their congress, or other forms in accordance with the provisions of laws,
rules and regulations, take part in democratic management or consult with the employing units on an equal footing about protection
of the legitimate rights and interests of laborers.

Article 9

The labor administrative department of the State Council shall be in charge of the management of labor of the whole country.

The labor administrative departments of the local people’s governments at or above the county level shall be in charge of the management
of labor in the administrative areas under their respective jurisdiction.

Chapter II Promotion of Employment

Article 10

The State shall create conditions for employment and increase opportunities for employment by means of the promotion of economic and
social development.

The State shall encourage enterprises, institutional organizations, and societies to initiate industries or expand businesses for
the increase of employment within the scope of the stipulations of laws, and administrative rules and regulations.

The State shall support laborers to get jobs by organizing themselves on a voluntary basis or by engaging in individual businesses.

Article 11

Local people’s governments at various levels shall take measures to develop various kinds of job-introduction agencies and provide
employment services.

Article 12

Laborers shall not be discriminated against in employment, regardless of their ethnic community, race, sex, or religious belief.

Article 13

Females shall enjoy equal rights as males in employment. It shall not be allowed, in the recruitment of staff and workers, to use
sex as a pretext for excluding females from employment or to raise recruitment standards for the females, except for the types of
work or posts that are not suitable for females as stipulated by the State.

Article 14

Where there are special stipulations in laws, rules and regulations on the employment of the disabled, the personnel of national minorities,
and demobilized armymen, such special stipulations shall apply.

Article 15

No employing units shall be allowed to recruit juveniles under the age of 16.

Units of literature and art, physical culture and sport, and special arts and crafts that need to recruit juveniles under the age
of 16 must go through the formalities of examination and approval according to the relevant provisions of the State and guarantee
their right to compulsory education.

Chapter III Labor Contracts and Collective Contracts

Article 16

A labor contract is the agreement reached between a laborer and an employing unit for the establishment of the labor relationship
and the definition of the rights, interests and obligations of each party.

A labor contract shall be concluded where a labor relationship is to be established.

Article 17

Conclusion and modification of a labor contract shall follow the principles of equality, voluntariness and unanimity through consultation,
and shall not run counter to the stipulations of laws, administrative rules and regulations.

A labor contract once concluded in accordance with the law shall possess legal binding force. The parties involved must fulfill the
obligations as stipulated in the labor contract.

Article 18

The following labor contracts shall be invalid:

(1) labor contracts concluded in violation of laws, administrative rules and regulations; and

(2) labor contracts concluded by resorting to such measures as cheating and intimidation.

An invalid labor contract shall have no legal binding force from the very beginning of its conclusion. Where a part of a labor contract
is confirmed as invalid and where the validity of the remaining part is not affected, the remaining part shall remain valid.

The invalidity of a labor contract shall be confirmed by a labor dispute arbitration committee or a people’s court.

Article 19

A labor contract shall be concluded in written form and contain the following clauses:

(1) term of a labor contract;

(2) contents of work;

(3) labor protection and working conditions;

(4) labor remuneration;

(5) labor disciplines;

(6) conditions for the termination of a labor contract; and

(7) responsibility for the violation of a labor contract.

Apart from the required clauses specified in the preceding paragraph, other contents in a labor contract may be agreed upon through
consultation by the parties involved.

Article 20

The term of a labor contract shall be divided into fixed term, flexible term or taking the completion of a specific amount of work
as a term.

In case a laborer has kept working in a same employing unit for ten years or more and the parties involved agree to extend the term
of the labor contract, a labor contract with a flexible term shall be concluded between them if the laborer so requested.

Article 21

A probation period may be agreed upon in a labor contract. The longest probation period shall not exceed six months.

Article 22

The parties involved in a labor contract may reach an agreement in their labor contract on matters concerning keeping the commercial
secrets of the employing unit.

Article 23

A labor contract shall terminate upon the expiration of its term or the emergence of the conditions for the termination of the labor
contract as agreed upon by the parties involved.

Article 24

A labor contract may be revoked upon agreement reached between the parties involved through consultation.

Article 25

The employing unit may revoke the labor contract with a laborer in any of the following circumstances:

(1) to be proved not up to the requirements for recruitment during the probation period;

(2) to seriously violate labor disciplines or the rules and regulations of the employing unit;

(3) to cause great losses to the employing unit due to serious dereliction of duty or engagement in malpractice for selfish ends;
and

(4) to be investigated for criminal responsibilities in accordance with the law.

Article 26

In any of the following circumstances, the employing unit may revoke a labor contract but a written notification shall be given to
the laborer 30 days in advance:

(1) where a laborer is unable to take up his original work or any new work arranged by the employing unit after the completion of
his medical treatment for illness or injury not suffered from at work;

(2) where a laborer is unqualified for his work and remains unqualified even after receiving a training or an adjustment to an other
work post; and

(3) no agreement on modification of the labor contract can be reached through consultation by the parties involved when the objective
conditions taken as the basis for the conclusion of the contract have greatly changed so that the original labor contract can no
longer be carried out.

Article 27

During the period of statutory consolidation when the employing unit comes to the brink of bankruptcy or runs deep into difficulties
in production and management, and if reduction of its personnel becomes really necessary, the unit may make such reduction after
it has explained the situation to the trade union or all of its staff and workers 30 days in advance, solicited opinions from them
and reported to the labor administrative department.

Where the employing unit is to recruit personnel six months after the personnel reduction effected according to the stipulations of
this Article, the reduced personnel shall have the priority to be re-employed.

Article 28

The employing unit shall make economic compensations in accordance with the relevant provisions of the State if it revokes its labor
contracts according to the stipulations in Article 24 , Article 26 and Article 27 of this Law.

Article 29

The employing unit shall not revoke its labor contract with a laborer in accordance with the stipulations in Article 26 and Article
27 of this Law in any of the following circumstances:

(1) to be confirmed to have totally or partially lost the ability to work due to occupational diseases or injuries suffered from at
work;

(2) to be receiving medical treatment for diseases or injuries within the prescribed period of time;

(3) to be a female staff member or worker during pregnant, puerperal, or breast-feeding period; or

(4) other circumstances stipulated by laws, administrative rules and regulations.

Article 30

The trade union of an employing unit shall have the right to air its opinions if it regards as inappropriate the revocation of a labor
contract by the unit. If the employing unit violates laws, rules and regulations or labor contracts, the trade union shall have the
right to request for reconsideration. Where the laborer applies for arbitration or brings in a lawsuit, the trade union shall render
him support and assistance in accordance with the law.

Article 31

A laborer who intends to revoke his labor contract shall give a written notice to the employing unit 30 days in advance.

Article 32

A laborer may notify at any time the employing unit of his decision to revoke the labor contract in any of the following circumstances:

(1) within the probation period;

(2) where the employing unit forces the laborer to work by resorting to violence, intimidation or illegal restriction of personal
freedom; or

(3) failure on the part of the employing unit to pay labor remuneration or to provide working conditions as agreed upon in the labor
contract.

Article 33

The staff and workers of an enterprise as one party may conclude a collective contract with the enterprise on matters relating to
labor remuneration, working hours, rest and vacations, occupational safety and health, and insurance and welfare. The draft collective
contract shall be submitted to the congress of the staff and workers or to all the staff and workers for discussion and adoption.

A collective contract shall be concluded by the trade union on behalf of the staff and workers with the enterprise; in an enterprise
where the trade union has not yet been set up, such contract shall be also concluded by the representatives elected by the staff
and workers with the enterprise.

Article 34

A collective contract shall be submitted to the labor administrative department after its conclusion. The collective contract shall
go into effect automatically if no objections are raised by the labor administrative department within 15 days from the date of the
receipt of a copy of the contract.

Article 35

Collective contracts concluded in accordance with the law shall have binding force to both the enterprise and all of its staff and
workers. The standards on working conditions and labor payments agreed upon in labor contracts concluded between individual laborers
and the enterprise shall not be lower than those as stipulated in collective contracts.

Chapter IV Working Hours, Rest and Vacations

Article 36

The State shall practise a working hour system under which laborers shall work for no more than eight hours a day and no more than
44 hours a week on the average.

Article 37

In case of laborers working on the basis of piecework, the employing unit shall rationally fix quotas of work and standards on piecework
remuneration in accordance with the working hour system stipulated in Article 36 of this Law.

Article 38

The employing unit shall guarantee that its staff and workers have at least one day off in a week.

Article 39

Where an enterprise can not follow the stipulations in Article 36 and Article 38 of this Law due to its special production nature,
it may adopt other rules on working hours and rest with the approval of the labor administrative department.

Article 40

The employing unit shall arrange holidays for laborers in accordance with the law during the following festivals:

(1) the New Year’s Day;

(2) the Spring Festival;

(3) the International Labor Day;

(4) the National Day; and

(5) other holidays stipulated by laws, rules and regulations.

Article 41

The employing unit may extend working hours due to the requirements of its production or business after consultation with the trade
union and laborers, but the extended working hour for a day shall generally not exceed one hour; if such extension is called for
due to special reasons, the extended hours shall not exceed three hours a day under the condition that the health of laborers is
guaranteed. However, the total extension in a month shall not exceed thirty six hours.

Article 42

The extension of working hours shall not be subject to restriction of the provisions of Article 41 of this Law under any of the following
circumstances:

(1) where emergent dealing is needed in the event of natural disaster, accident or other reason that threatens the life, health and
the safety of property of laborers;

(2) where prompt rush repair is needed in the event of breakdown of production equipment, transportation lines or public facilities
that affects production and public interests; and

(3) other circumstances as stipulated by laws, administrative rules and regulations.

Article 43

The employing unit shall not extend working hours of laborers in violation of the provisions of this Law.

Article 44

The employing unit shall, according to the following standards, pay laborers remunerations higher than those for normal working hours
under any of the following circumstances:

(1) to pay no less than 150 per cent of the normal wages if the extension of working hours is arranged;

(2) to pay no less than 200 per cent of the normal wages if the extended hours are arranged on days of rest and no deferred rest can
be taken; and

(3) to pay no less than 300 per cent of the normal wages if the extended hours are arranged on statutory holidays.

Article 45

The State shall practise a system of annual vacation with pay.

Laborers who have kept working for one year and more shall be enpost_titled to annual vacation with pay. The concrete measures shall be
formulated by the State Council.

Chapter V Wages

Article 46

The distribution of wages shall follow the principle of distribution according to work and equal pay for equal work.

The level of wages shall be gradually raised on the basis of economic development. The State shall exercise macro-regulations and
control over the total payroll.

Article 47

The employing unit shall independently determine its form of wage distribution and wage level for its own unit according to law and
based on the characteristics of its production and business and economic results.

Article 48

The State shall implement a system of guaranteed minimum wages. Specific standards on minimum wages shall be determined by the people’s
governments of provinces, autonomous regions or municipalities directly under the Central Government and reported to the State Council
for the record.

Wages paid to laborers by the employing unit shall not be lower than the local standards on minimum wages.

Article 49

The determination and readjustment of the standards on minimum wages shall be made with reference to the following factors in a comprehensive
manner:

(1) the lowest living expenses of laborers themselves and the average family members they support;

(2) the average wage level of the society as a whole;

(3) labor productivity;

(4) the situation of employment; and

(5) the different levels of economic development between regions.

Article 50

Wages shall be paid monthly to laborers themselves in cash. The wages paid to laborers shall not be deducted or delayed without justification.

Article 51

The employing unit shall pay wages according to law to laborers who observe statutory holidays, take leaves during the periods of
marriage or funeral, or participate in social activities in accordance with the law.

Chapter VI Occupational Safety and Health

Article 52

The employing unit must establish and perfect the system for occupational safety and health, strictly implement the rules and standards
of the State on occupational safety and health, educate laborers on occupational safety and health, prevent accidents in the process
of work, and reduce occupational hazards.

Article 53

Facilities of occupational safety and health must meet the standards stipulated by the State.

Facilities of occupational safety and health installed in new projects and projects to be rebuilt or expanded must be designed, constructed
and put into operation and use at the same time as the main projects.

Article 54

The employing unit must provide laborers with occupational safety and health conditions conforming to the provisions of the State
and necessary articles of labor protection, and provide regular health examination for laborers engaged in work with occupational
hazards.

Article 55

Laborers to be engaged in specialized operations must receive specialized training and acquire qualifications for such special operations.

Article 56

Laborers must strictly abide by rules of safe operation in the process of their work.

Laborers shall have the right to refuse to operate if the management personnel of the employing unit command the operation in violation
of rules and regulations or force laborers to run risks in operation; laborers shall have the right to criticize, report or file
charges against the acts endangering the safety of their life and health.

Article 57

The State shall establish a system for the statistics, reports and dispositions of accidents of injuries and deaths, and cases of
occupational diseases. The labor administrative departments and other relevant departments of the people’s governments at or above
the county level and the employing unit shall, according to law, compile statistics, report and dispose of accidents of injuries
and deaths that occurred in the process of their work and cases of occupational diseases.

Chapter VII Special Protection for Female and Juvenile Workers

Article 58

The State shall provide female workers and juvenile workers with special protection.

“Juvenile workers” hereby refer to laborers at the age of 16 but not 18 yet.

Article 59

It is prohibited to arrange female workers to engage in work down the pit of mines, or work with Grade IV physical labor intensity
as stipulated by the State, or other work that female workers should avoid.

Article 60

Female workers during their menstrual periods shall not be arranged to engage in work high above the ground, under low temperature,
or in cold water or work with Grade III physical labor intensity as stipulated by the State.

Article 61

Female workers during their pregnancy shall not be arranged to engage in work with Grade III physical labor intensity as stipulated
by the State or other work that they should avoid in pregnancy. Female workers pregnant for seven months or more shall not be arranged
to extend their working hours or to work night shifts.

Article 62

After childbirth, female workers shall be enpost_titled to no less than ninety days of maternity leaves with pay.

Article 63

Female workers during the period of breast-feeding their babies less than one year old shall not be arranged to engage in work with
Grade III physical labor intensity as stipulated by the State or other labor that they should avoid during their breast-feeding period,
or to extend their working hours or to work night shifts.

Article 64

No juvenile workers shall be arranged to engage in work down the pit of mines, work that is poisonous or harmful, work with Grade
IV physical labor intensity as stipulated by the State, or other work that they should avoid.

Article 65

The employing unit shall provide regular physical examinations to juvenile workers.

Chapter VIII Vocational Training

Article 66

The State shall take various measures through various channels to expand vocational training undertakings so as to develop professional
skills of laborers, improve their qualities, and raise their employment capability and work ability.

Article 67

People’s governments at various levels shall incorporate the development of vocational training in the plans of social and economic
development, encourage and support all enterprises, institutional organizations, societies and individuals, where conditions permit,
to sponsor all kinds of vocational training.

Article 68

The employing unit shall establish a system for vocational training, raise and use funds for vocational training in accordance with
the provisions of the State, and provide laborers with vocational training in a planned way and in the light of the actual situation
of the unit.

Laborers to be engaged in technical work must receive pre-job training before taking up their posts.

Article 69

The State shall determine occupational classification, set up professional skill standards for the occupations classified, and practise
a system of vocational qualification certificates. Examination and verification organizations authorized by the government are in
charge of the examination and verification of the professional skills of laborers.

Chapter IX Social Insurance and Welfare

Article 70

The State shall develop social insurance undertakings, establish a social insurance system, and set up social insurance funds so that
laborers may receive assistance and compensations under such circumstances as old age, illness, work-related injury, unemployment
and child-bearing.

Article 71

The level of social insurance shall be in proportion to the level of social and economic development and the social affordability.

Article 72

The sources of social insurance funds shall be determined according to the categories of insurance, and an overall pooling of insurance
funds from the society shall be introduced step by step. The employing unit and laborers must participate in social insurance and
pay social insurance premiums in accordance with the law.

Article 73

Laborers shall, in accordance with the law, enjoy social insurance benefits under the following circumstances:

(1) retirement;

(2) illness or injury;

(3) disability caused by work-related injury or occupational disease;

(4) unemployment; and

(5) child-bearing.

The survivors of the insured laborers shall be enpost_titled to subsidies for survivors in accordance with the law.

The conditions and standards for laborers to enjoy social insurance benefits shall be stipulated by laws, rules and regulations.

The social insurance amount that laborers are enpost_titled to, must be timely paid in full.

Article 74

The agencies in charge of social insurance funds shall collect, expend, manage and operate the funds in accordance with the stipulations
of laws, and assume the responsibility to maintain and raise the value of these funds.

The supervisory organizations of social insurance funds shall exercise supervision over the revenue and expenditure, management and
operation of social insurance funds in accordance with the stipulations of laws.

The establishment and function of the agencies in charge of social insurance funds and the supervisory organizations of social insurance
funds shall be stipulated by laws.

No organization or individual shall be allowed to misappropriate social insurance funds.

Article 75

The State shall encourage the employing unit to set up supplementary insurance for laborers according to its practical situations.

The State shall advocate that laborers practise individual insurance in form of saving account.

Article 76

The State shall develop social welfare undertakings, construct public welfare facilities, and provide laborers with conditions for
taking rest, recuperation and rehabilitation.

The employing unit shall create conditions so as to improve collective welfare and raise welfare treatment of laborers.

Chapter X Labor Disputes

Article 77

Where a labor dispute between the employing unit and laborers takes place, the parties concerned may apply for mediation or arbitration
or take legal proceedings according to law, or may seek for a settlement through consultation.

The principle of mediation shall apply to the procedures of arbitration and lawsuit.

Article 78

The settlement of a labor dispute shall follow the principle of legality, fairness and promptness so as to safeguard in accordance
with the law the legitimate rights and interests of the parties involved.

Article 79

Where a labor dispute takes place, the parties involved may apply to the labor dispute mediation committee of their unit for mediation;
if the mediation fails and one of the parties requests for arbitration, that party may apply to the labor dispute arbitration committee
for arbitration. Either party may also directly apply to the labor dispute arbitration committee for arbitration. If one of the parties
is not satisfied with the adjudication of arbitration, the party may bring the case to a people’s court.

Article 80

A labor dispute mediation committee may be established inside the employing unit. The committee shall be composed of representatives
of the staff and workers, representatives of the employing unit, and representatives of the trade union. The chairman of the committee
shall be held by a representative of the trade union.

Agreements reached on labor disputes through mediation shall be implemented by the parties involved.

Article 81

A labor dispute arbitration committee shall be composed of representatives of the labor administrative department, representatives
from the trade union at the corresponding level, and representatives of the employing unit. The chairman of the committee shall be
held by a representative of the labor administrative department.

Article 82

The party that requests for arbitration shall file a written application to a labor dispute arbitration committee within 60 days starting
from the date of the occurrence of a labor dispute. The arbitration committee may generally make an adjudication within 60 days from
the date of receiving the application. The parties involved must implement the adjudication if no objections are raised.

Article 83

Where a party involved in a labor dispute is not satisfied with the adjudication, the party may bring a lawsuit to a people’s court
within 15 days from the date of receiving the ruling of arbitration. Where one of the parties involved neither brings a lawsuit nor
implements the adjudication of arbitration within the statutory time limit, the other party may apply to a people’s court for compulsory
implementation.

Article 84

Where a dispute arises from the conclusion of a collective contract and no settlement can be reached through consultation by the parties
concerned, the labor administrative department of the local people’s government may organize the relevant departments to handle the
case in coordination.

Where a dispute arises from the implementation of a collective contract and no settlement can be reached through consultation by the
parties concerned, the dispute may be submitted to the labor dispute arbitration committee for arbitration. Any party that is not
satisfied with the adjudication of arbitration may bring a lawsuit to a people’s court within 15 days from the date of receiving
the adjudication.

Chapter XI Supervision and Inspection

Article 85

The labor administrative departments of people’s governments at or above the county level shall, in accordance with the law, supervise
and inspect the implementation of laws, rules and regulations on labor by the employing unit, and have the power to stop any acts
that run counter to laws, rules and regulations on labor and order the rectification thereof.

Article 86

The inspectors from the labor administrative departments of people’s governments at or above the county level shall, while performing
their public duties, have the right to enter the employing units to make investigations about the implementation of laws, rules and
regulations on labor, examine necessary data and inspect labor sites.

The inspectors from the labor administrative departments of people’s governments at or above the county level must show their certifications
while performing public duties, impartially enforce laws, and abide by relevant stipulations.

Article 87

Relevant departments of people’s governments at or above the county level shall, within the scope of their respective duties and responsibilities,
supervise the implementation of laws, rules and regulations on labor by the employing units.<

CIRCULAR OF THE STATE COUNCIL ON CONCERNING STRICT CONTROL OF THE REDUCTION OF AND EXEMPTION FROM IMPORT TAXATION

Category	TAXATION	Organ of Promulgation	The State Council	Status of Effect	In Force
Date of Promulgation	1994-04-19	Effective Date	1994-04-19

Circular of the State Council on Concerning Strict Control of the Reduction of and Exemption From Import Taxation

(April 19, 1994)

The policy of the Central Party Committee and the State
Council on strengthening the macro-control demands that the
departments of taxation affairs at all levels should administer the
taxation according to law, strengthen the levy of taxation, stop up loopholes
of tax reduction and exemption, reinforce and perfect the macro-control,
thus to insure the state revenue. Accordingly, the State Council and its
relevant departments have already ceased to approve all temporary reduction of
or exemption from custom duty, import-related value-added tax and
consumption tax (hereinafter referred to as “import-related tax”), and
clarified all the regulations on reduction of and exemption from custom duty
and import-related tax. But, since this year, there are still
many localities and units applying to the State Council and relevant
departments for approval of custom duty and import-related tax reduction and
exemption. In order to exercise stricter control of the reduction of or
exemption from custom duty and import-related tax, strengthen the
imposition and administration of taxation, bring into play the role of the
taxation as a means of regulating the state economy, insure the smooth
reform of the state financial and taxation system, this Circular is to
articulate on the relevant issues as following:

1. The custom duty and import-related tax belong to the
central government, which is one of the important means to regulate
the state macro-economy, and also one of the important sources of
central government’s revenue. No organizations, localities,
units, or individuals shall have power to determine reduction of or
exemption from these kinds of taxes.

2. No localities or departments shall be permitted to apply to the State
Council or relevant departments for approval of the reduction of and exemption
from custom duty or import-related tax. From now on the State Council and its
relevant departments shall not accept or approve such kind of application.
Localities or departments should mainly rely on its own resources to overcome
its own difficulties. With regard to the difficulties of those poor areas and
special difficulties resulting from serious natural disasters, as a principle
they should be solved by self-rescue through production or financial
allowances at their own levels.

3. The Committee on Custom Duty Regulation under the State Council,
the Ministry of Finance and the General Bureau of Taxation Affairs
shall continue to clarify the current regulations on reduction of and
exemption from the custom duty and import-related tax, and shall submit to
the State Council a detailed list of items one by one, and with its
decision on it attached. Those regulations on tax reduction and exemption
that are in compliance with international practice and demands of building
up of socialist market economy, shall be remained effective and
promulgated to the public after revision and rearrangement. Those few
existing tax reductions and exemptions based on regulations for consideration
of industrial policy and other special needs shall only be effective within
the term stipulated or the quotas specified. Once the term expires or the
quotas run out, they shall all be terminated. The term shall not be extended
and the quotas shall not be increased. Except the above situations, all
other tax reduction and exemption regulations shall be cleared up and
annulled in groups before the end of 1995.

4. Custom duty and import-related taxes are one of the important means
to regulate the state’s macro-economy, and the policy of uniform,
standardization, equality and openness should be implemented in this regard.
The state government shall readjust the rate of custom duty and
import-related taxes from time to time to satisfy the needs of industrial
development, macro-control of economy and the expansion of economic exchanges
with foreign countries. All localities and departments may forward their
suggestions on the tax structure and tax rate to the Committee of Custom
Duty Regulation under the State Council (its office is established in
the State Economy and Trade Commission), the Ministry of Finance and
the General Bureau of Taxation Affairs. After joint discussion, the
above three departments shall submit their opinion to the State Council for a
decision.

5. The Customs and the departments of taxation affairs should take
concrete measures to strengthen the administration of taxation and strictly
implement all regulations on taxation. All localities and departments should
take over-all interest of state as its aim, protect the sanctity of tax
statutes and regulations, and assist the work of taxation. Any violation of
the tax law, any expansion of tax reduction and exemption without
authorization shall be punished seriously.

LETTER OF CHINA SECURITIES REGULATORY COMMISSION ON HOW TO CONFIRM THE STANDARD OF ALLOTTING PROFITS WHEN THE B-SHARES ENTERPRISES SHARE BONUS

The China Securities Regulatory Commission

Letter of China Securities Regulatory Commission on How to Confirm the Standard of Allotting Profits when the B-shares Enterprises
Share Bonus

ZhengJianHanZi [1994] No.1

January 6, 1994

Shenzhen stock exchange corporation, Shanghai stock exchange corporation:

The department of listed companies of the China Securities Regulatory Commission received the letter from Shenzhen stock exchange
corporation on December 3, 1993, in which it asked whether the B-share enterprises can follow the example of H-shares enterprise
to allot profits according to the lower-amount one of two report forms of profits audited by domestic and oversea accountants when
they share bonus.

China Securities Regulatory Commission consulted with the administration department of accounting matters of the Ministry of Finance,
and hereby gives a reply as follows:

According to the relevant provisions, during the allocation of profits, the H-shares enterprises allot profits according to the
lower-amount one of the two report forms of profits audited by domestic accountants and oversea accountants and supported to the
domestic and overseas investors. The B-shares enterprises should conduct as it.

The China Securities Regulatory Commission
1994-01-06

CIRCULAR OF THE GENERAL OFFICE OF THE STATE COUNCIL FOR TRANSMITTING RECOMMENDATIONS SUBMITTED BY THE STATE COMMISSION OF ECONOMY AND TRADE CONCERNING IMPROVEMENT OF THE ADMINISTRATION OF LAND TRANSPORTATION PORTS IN SHENZHEN

Category	PORT ADMINISTRATION	Organ of Promulgation	The State Council	Status of Effect	In Force
Date of Promulgation	1994-02-28	Effective Date	1994-02-28

Circular of the General Office of the State Council for Transmitting Recommendations Submitted by the State Commission of Economy and Trade Concerning Improvement of the Administration of Land Transportation Ports in Shenzhen

RECOMMENDATIONS SUBMITTED BY THE STATE COMMISSION OF ECONOMY AND TRADE

(Approved on February 28, 1994)

The State Council has approved the “Recommendations Submitted by the State
Commission of Economy and Trade Concerning Improvement of the Administration
of Land Transportation Ports in Shenzhen.” The following document is hereby
transmitted to you for implementation.
RECOMMENDATIONS SUBMITTED BY THE STATE COMMISSION OF ECONOMY AND TRADE
CONCERNING IMPROVEMENT OF THE ADMINISTRATION OF LAND TRANSPORTATION PORTS IN
SHENZHEN (Submitted on February 17, 1994)

The following recommendations are designed to strengthen the
administration of land transportation ports in Shenzhen, reduce redundant
inspections and examinations, simplify procedures, enhance efficiency and
guarantee the safety and smooth operation of ports. In accordance with
instructions issued by the State Council, the State Commission of Economy and
Trade and the State Council Office in Charge of Port Affairs, in cooperation
with the Ministry of Public Security, Ministry of Personnel, Ministry of
Communications, Ministry of Agriculture, Ministry of Foreign Economic
Relations and Trade, General Administration of Customs, Hongkong and Macao
Affairs Office of the State Council, Hongkong Branch of Xinhua News Agency,
State Administration for the Inspection of Import and Export Commodities,
the People’s Government of Guangdong Province and the People’s Government of
Shenzhen Municipality, do hereby submit the following recommendations
concerning the administration of land transportation ports in Shenzhen. The
following recommendations are based on on-the-spot investigations and studies
of land transportation ports in Shenzhen.

1. Effective March 1, 1994, inspections and examinations of all land
transportation ports in Shenzhen will focus on the introduction of new methods
for said inspections and examinations of overall customs and inspection
declarations, one-step sampling examination, combined inspections, a new
circulation chain and coordinated processing services in order to simplify
procedures and ensure the flow of people, commodities and vehicles entering
and exiting will provide greater convenience and speed.

2. In order to reduce redundancies involving the inspection and
examination of commodities at land transportation ports in Shenzhen, effective
March 1 1994, the existing four-step inspection declaration will be replaced
by a three-step inspection declaration. The new declaration system will
combine sanitation inspection and animal-plant inspection into one link; This
will in turn combine customs, sanitation inspection and animal-plant
inspection into one link. The new system will effectively transform
the three-step inspection declaration into a two-step inspection declaration.

3. Effective March 1, the office in charge of port affairs will assume
responsibility for collecting fees on behalf of other institutions, and will
then distribute said fees in accordance with stipulated standards.

4. Upon completion of the Guangzhou-Shenzhen Highway, a trial 24-hour
inspection and examination service will be introduced to the two thoroughfares
running to Huanggang Port.

5. Before accomplishment of the professionalism of frontier inspection,
the work of inspections of commodities on major thoroughfares leading to land
transportation ports in Shenzhen shall be conducted by cadres in the ranks of
frontier guards, so as to raise the quality and efficiency of administrative
personnel involved in frontier inspection activities.

6. The Shenzhen Office of Port Affairs shall reduce repeated sampling and
inspection by inspection and examination institutions, concentrate on key
point involving said inspections and examinations, and rationalize the
division of labor. The office shall proceed in accordance with practical
conditions at ports to adopt concrete and divisive inspection and examination
methods for sanitation, animal-plant and commodities inspections of all import
and export commodities based on the related requirements of the “Official
Reply Concerning the Concentrated Inspection and Examination, and Unified
Collection of Fees at Land Transportation Ports in Shenzhen” issued by the
People’s Government of Guangdong Province.

7. All inspection and examination institutions at ports shall support the
work of the office in charge of port affairs, and will be required to carry
out activities organized and coordinated by the office under the authorization
of the State Council and local government. The Shenzhen Office of Port Affairs
shall be responsible to coordinating and dealing with all cases involving
emergency situations and major matters concerning aliens.

8. Port personnel in charge of inspection and examination shall
conscientiously enhance their ideas of service, politeness and performance of
inspections and examinations. All port departments shall ensure honest
administration, adopt pertinent rules and regulations, eliminate loopholes to
prevent corruption, and severely punish those violating said rules and
regulations.

9. In order to benefit the development of the foreign trade, all competent
departments of inspection and examination, and the Shenzhen Office of Port
Affairs shall pay close attention to thoroughly examining the existing fee
structure for import and export inspection and examination, and in cooperation
with the department of pricing shall carry out necessary inspections and
appropriate adjustment with regard to unreasonable charges and standards.

10. Inspection and examination units at ports shall actively adopt
advanced technology and equipment, and ensure inspection and examination
procedures are carried out rapidly, accurately and scientifically.

11. In order to ensure the administration of ports follows current
international practices, the Central Commission on Composition of Government
Organization, State Commission for Restructuring Economy and State Council
Office of Port Affairs shall cooperate with departments concerned to carry out
a special study on the institutional reform of the system of frontier,
sanitation, animal and plant and import and export commodities inspections,
and related reform of port administration. They shall then submit a plan to
the State Council for approval and subsequent implementation.

PROTECTION OF CONSUMER RIGHTS AND INTERESTS LAW

Law of the People’s Republic of China on the Protection of Consumer Rights and Interests



	(Adopted at the Fourth Meeting of the Standing Committee of the Eighth National People’s Congress and promulgated by Order No.11 of the President of the People’s Republic of China on October 31, 1993) Contents Chapter I General Provisions Chapter II Rights of Consumers Chapter III Obligations of Business Operators Chapter IV Protection of Legitimate Rights and Interests of Consumers by the State Chapter V Consumer Organizations Chapter VI Settlement of Disputes Chapter VII Legal Responsibility Chapter VIII Supplementary Provisions Chapter I General Provisions Article 1 The present Law is formulated for the protection of the legitimate rights and interests of consumers, maintenance of the socio-economic order and promotion of the healthy development of the socialist market economy. Article 2 The rights and interests of consumers in purchasing and using commodities or receiving services for daily consumption shall be under the protection of the present Law, or under the protection of other relevant laws and regulations in absence of stipulations in this Law. Article 3 Business operators shall, in their supply of commodities produced and sold by them or services to consumers, abide by the present Law, or abide by other relevant laws and regulations in absence of stipulations in the present law. Article 4 In transactions between business operators and consumers a principle of voluntariness, equality, fairness, honesty and credibility shall be followed. Article 5 The State shall protect the legitimate rights and interests of consumers from infringement. The State shall adopt measures to safeguard consumers’ exercise of their rights in accordance with the law and to maintain the legitimate rights and interests of consumers. Article 6 It is the common responsibility of the whole society to protect the legitimate rights and interests of consumers. The State shall encourage and support all organizations and individuals to exercise social supervision over acts infringing upon consumer rights and interests. Mass media shall conduct propaganda defending the legitimate rights and interests of consumers and, through public opinion, exercise supervision over acts infringing upon the legitimate rights and interests of consumers. Chapter II Rights of Consumers Article 7 Consumers shall, in their purchasing and using commodities or receiving services, enjoy the right of the inviolability of their personal and property safety. Consumers shall have the right to demand business operators to supply commodities and services up to the requirements for personal and property safety. Article 8 Consumers shall enjoy the right to obtain true information of the commodities they purchase and use or the services they receive. Consumers shall have the right to demand business operators, in light of the different conditions of commodities or services, to provide their prices, origin, manufacturers, usage, functions, standards, grades, main ingredients, date of production, term of validity, certificates of inspection, operation instructions, after sale services or information relating to contents, standards and costs of the services. Article 9 Consumers shall enjoy the right of free choice of commodities or services. Consumers shall have the right to make a free choice of business operators for supply of commodities or services, select freely among varieties of articles or forms of services and decide independently to buy or not to buy any kind of commodities, or to accept or not to accept any item of services. Consumers shall have the right to make comparisons, differentiations and selections when they make a free choice of commodities or services. Article 10 Consumers shall enjoy the right of fair deal. Consumers shall, in their purchasing commodities or receiving services, have the right to obtain fair deal prerequisites such as guarantee of quality, reasonable prices and correct measurement, and have the right to refuse any compulsory transaction of business operators. Article 11 Consumers suffering from personal injury or property damage resulting from their purchasing or using of commodities or receiving of services shall have the right to demand compensations in accordance with the law. Article 12 Consumers shall have the right to form public organizations for the maintenance of their own legitimate rights and interests according to law. Article 13 Consumers shall have the right to acquire knowledge concerning consumption and protection of consumer rights and interests. Consumers shall make efforts to master the knowledge of their necessary commodities or services and the skill in operation thereof, apply the commodities in a correct way and raise their consciousness of self-protection. Article 14 Consumers shall, in their purchasing and using commodities or receiving services, have the right that their human dignity, national customs and habits are respected. Article 15 Consumers shall have the right to exercise supervision over commodities, services as well as the work of protection of consumer rights and interests. Consumers shall have the right to inform and charge against the infringement upon consumer rights and interests and the breach of law or neglect of duty on the part of State organs and their functionaries in the work of protection of consumer rights and interests, and have the right to raise criticism of or proposals for the work of protection of consumer rights and interests. Chapter III Obligations of Business Operators Article 16 Business operators shall, in their supply of commodities and services to consumers, fulfill their obligations stipulated in the Law of the People’s Republic of China on Product Quality and other laws and regulations concerned. In case an agreement is reached between business operators and consumers, the business operators shall fulfill the obligations agreed upon in the agreement; but the agreement between the two parties shall not contravene the provisions of laws and regulations. Article 17 Business operators shall listen to the consumers’ opinions on the commodities and services they supply and accept consumers’ supervision. Article 18 Business operators shall guarantee that the commodities and services they supply meet the requirements for personal or property safety. As to commodities and services liable to harm personal or property safety, business operators shall give the consumers truthful explanation and clear-cut warnings, and shall explain or indicate the correct ways of using the commodities or receiving services as well as the methods of preventing damage. Business operators shall, upon discovery of serious defects of the commodities or services they supply which are liable to harm personal or property safety even though the commodities are correctly applied or services are received in a correct way, immediately report to the administrative departments concerned and inform the consumers, and adopt measures to prevent damage. Article 19 Business operators shall provide consumers with authentic information concerning their commodities or services, and may not make any false and misleading propaganda. Business operators shall give truthful and definite replies to inquiries from consumers about the qualities of the commodities or services they supply and the operation methods thereof. Shops shall mark clearly the prices of the commodities they supply. Article 20 Business operators shall indicate their real names and marks. Business operators who lease counters or grounds from others shall indicate their own real names and marks. Article 21 Business operators who supply commodities or services shall make out for consumers invoices for purchases or documents of services in accordance with relevant regulations of the State or commercial practices; business operators must produce such invoices or documents where consumers so demand. Article 22 Business operators shall guarantee the quality, functions, usage and term of validity which the commodities or services they supply should possess under normal operation or acceptance, except that consumers are aware of the defects before they buy the commodities or receive the services. Business operators who employ advertisements, product instructions, samples or other ways to display the quality state of their commodities or services shall guarantee that the actual quality of the commodities or services they supply is in conformity with that demonstrated. Article 23 Business operators who are under the obligation of repair or caveat venditor, or other responsibilities in accordance with regulations of the State or agreements with consumers shall carry out such obligations correspondingly according to such regulations or agreements, and may not deliberately delay or unreasonably refuse to do so. Article 24 Business operators may not, through format contracts, notices, announcements, entrance hall bulletins and so on, impose unfair or unreasonable rules on consumers or reduce or escape their civil liability for their infringement of the legitimate rights and interests of consumers. Format contracts, notices, announcements, entrance hall bulletins and so on with contents mentioned in the preceding paragraph shall be invalid. Article 25 Business operators may not insult or slander consumers, may not search the body of consumers or the articles they carry with them, and may not violate the personal freedom of consumers. Chapter IV Protection of the Legitimate Rights and Interests of Consumers by the State Article 26 The State shall heed to the opinions and demands from consumers when making laws, regulations and policies concerning consumer rights and interests. Article 27 People’s governments at various levels shall strengthen their leadership, and organize, coordinate and supervise the administrative departments concerned to do their work well in the protection of the legitimate rights and interests of consumers. People’s governments at various levels shall strengthen supervision to prevent occurrence of acts damaging the personal or property safety of consumers and promptly check any such acts. Article 28 Administrative departments for industry and commerce of the people’s governments at various levels and other administrative departments concerned shall adopt measures to protect the legitimate rights and interests of consumers within the scope of their respective functions and duties in accordance with the provisions of the laws and regulations. Administrative departments concerned shall listen to the complaints of consumers and their public organizations as to the transactions of business operators and the quality of their commodities and services, and carry out timely investigation and disposition. Article 29 State organs concerned shall, in accordance with the provisions of laws and regulations, punish any law-breaking or criminal activities of business operators infringing upon the legitimate rights and interests of consumers in their supplying commodities or services. Article 30 The people’s courts shall adopt measures to facilitate consumers to take legal proceedings and must entertain and handle without delay cases of disputes over consumer rights and interests that meet the conditions for a lawsuit specified in the Civil Procedure Law of the People’s Republic of China. Chapter V Consumer Organizations Article 31 Consumer associations and other consumer organizations are public organizations formed according to law to exercise social supervision over commodities and services and to protect the legitimate rights and interests of consumers. Article 32 Consumer associations shall perform the following functions: (1) to provide consumption information and consultative services to consumers; (2) to participate in supervision over or inspection of commodities and services conducted by relevant administrative departments; (3) to make reports, inquiries and suggestions to relevant administrative departments about issues relating to the legitimate rights and interests of consumers; (4) to accept complaints of consumers and offer investigations and mediations with respect to issues of complaints; (5) where complaints are about commodities or services, to submit for appraisement issues of complaints to appraisal departments which shall inform them of the expert conclusions; (6) to render support to victims in their legal proceedings against infringement upon the rights and interests of consumers; (7) to expose and criticize through mass media the acts infringing upon the legitimate rights and interests of consumers. People’s governments at various levels shall give support to consumer associations in the performance of their functions. Article 33 Consumer organizations may not be engaged in commodity transactions or profit-making services, and may not recommend to the society commodities or services for the purpose of making profits. Chapter VI Settlement of Disputes Article 34 In case of disputes with business operators over consumer rights and interests, consumers may settle the disputes through the following approaches: (1) to consult and conciliate with business operators; (2) to make a request to consumer associations for mediation; (3) to appeal to relevant administrative departments; (4) to apply to arbitral organs for arbitration according to the arbitral agreements with business operators; (5) to institute legal proceedings in the people’s court. Article 35 Consumers whose legitimate rights and interests are infringed upon in their purchasing or using commodities may demand compensation from the sellers concerned. In case the liability is on the manufacturers or other sellers who supply the commodities to the said sellers, the said sellers shall, after paying the compensations, have the right to recover the compensations from the said manufacturers or the other sellers. Consumers or other victims suffering personal injuries or property damage resulting from defects of commodities may demand compensations either from the sellers or from the manufacturers. If the liability is on the manufacturers, the sellers shall, after paying the compensations, have the right to recover the compensations from the manufacturers; if the liability is on the sellers, the manufacturers shall, after paying the compensations, have the right to recover the compensations from the sellers. Consumers whose legitimate rights and interests are infringed upon in receiving services may demand compensations from suppliers of the services. Article 36 Consumers whose legitimate rights and interests are infringed upon in purchasing or using commodities or receiving services may, if the enterprises supplying the commodities or services have been split-up or merged, demand compensations from the enterprises succeeding to the rights and obligations of the original ones after the modifications. Article 37 In case a business operator unlawfully uses another’s business license to supply commodities or services and infringes upon the legitimate rights and interests of consumers, the consumers may demand compensations either from such business operator or from the holder of the business licence. Article 38 Consumers whose legitimate rights and interests are infringed upon in purchasing commodities or receiving services at trade fairs or leased counters may demand compensations from the sellers or suppliers of the services. In case the fairs are over or the lease of counters expires, they may also demand compensations from organizers of the fairs or lessors of the counters. Organizers of the fairs and lessors of the counters shall, after paying the compensations, have the right to recover the compensations from the sellers or suppliers of the services. Article 39 Consumers whose legitimate rights and interests are infringed upon on account of commodities or services supplied by business operators by means of false advertisement may demand compensations from the business operators. Consumers may demand the competent administrative departments to punish the advertising agents who make false advertisements. Advertising agents who cannot provide the real names and addresses of the business operators shall be liable for compensation. Chapter VII Legal Responsibility Article 40 Business operators shall, if the commodities and services they supply involve any of the following circumstances, bear civil liability in accordance with the provisions of the Law of the People’s Republic of China on Product Quality and other relevant laws and regulations, except as otherwise provided in the present Law: (1) there existing defects in the commodities; (2) not possessing the properties for use they should possess and no declaration thereabout is made at the time of sale; (3) not conforming to the standards indicated on the commodities or on the packaging thereof; (4) not conforming to the state of quality indicated by the product description or by physical samples; (5) producing commodities that have been formally declared by the State to be eliminated or selling commodities that are no longer effective or deteriorated; (6) commodities sold being short of weight or quantity; (7) contents and costs of services being not in conformity with the agreements; (8) deliberately delaying or unreasonably refusing consumers’ requests for repair, remanufacture, replacement, return of goods, makeup for the short commodities, return of payment for goods or services, or compensation for losses; (9) other circumstances infringing upon consumer rights and interests as specified by laws and regulations. Article 41 Business operators shall, if the commodities or services they supply have caused personal injuries to consumers or other victims, pay for the victims’ medical expenses, nursing expenses during medical treatment, the reduced income for loss of working time and other expenses. And business operators shall, if the commodities or services they supply have disabled the consumers, also pay for the victims’ expenses on self-help devices, living allowances, compensations for disability and the necessary living cost of the persons supported by the disabled. Business operators shall, if the case constitutes a crime, be investigated for criminal responsibility according to law. Article 42 Business operators shall, if the commodities or services they supply have caused death of consumers or other victims, pay funeral expenses, death compensation and the necessary living cost of the persons supported by the deceased during their lifetime. Business operators shall, if the case constitutes a crime, be investigated for criminal responsibility according to law. Article 43 Business operators who violate the provisions of Article 25 of the present Law and violate the human dignity or personal freedom of consumers shall stop the violations, rehabilitate consumers’ reputation, eliminate the bad effects, make apologies and compensations therefor. Article 44 Business operators shall, if the commodities or services they supply have caused damage to the properties of consumers, bear civil liabilities by means of repair, remanufacture, replacement, return of goods, makeup for the short commodities, return of payment for goods and services, or compensation for losses and so on as demanded by consumers. If consumers and business operators have otherwise agreed upon, such agreements shall be fulfilled. Article 45 Business operators shall be responsible for repair, replacement or return of goods, if repair, replacement or return of goods is guaranteed by provisions of the State or agreed upon between business operators and consumers. Business operators shall be responsible for replacement or return of goods if the commodities still malfunction after being repaired twice within the term of guaranteed repair. As to large-sized commodities guaranteed for repair, replacement or return, business operators shall bear the reasonable costs such as expenses for carriage if consumers demand repair, replacement or return. Article 46 Business operators who supply commodities by mail-order shall provide their commodities according to the agreements. Business operators who fail to provide their commodities according to the agreements shall fulfil the agreements or return the consumers’ payment for the commodities on the demand of the consumers, and bear the reasonable expenses that the consumers have to pay. Article 47 Business operators who supply commodities or services in the form of advance payment shall provide their commodities or services according to the agreements. Business operators who fail to provide their commodities or services according to the agreements shall fulfil the agreements or return the advance payment on the demand of the consumers, and shall also bear the interest of the advance payment and other necessary expenses that the consumers have to pay. Article 48 Business operators shall, on the demand of the consumers, be responsible for return of goods determined to be substandard commodities by administrative departments concerned according to law. Article 49 Business operators engaged in fraudulent activities in supplying commodities or services shall, on the demand of the consumers, increase the compensations for victims’ losses; the increased amount of the compensations shall be one time the costs that the consumers paid for the commodities purchased or services received. Article 50 If business operators are under any of the following circumstances and the Law of the People’s Republic of China on Product Quality and other laws and regulations have provided for punitive organs and forms therefor, the provisions of the laws or regulations shall be applied; in absence of such provisions in the laws or regulations, administrative departments for industry and commerce shall order them to make corrections, and may, in light of the circumstances, punish the offenders exclusively or concurrently with warning, confiscation of unlawful earnings, or imposition of a fine not less than one time but not more than five times the value of the unlawful earnings; in case there involves no unlawful earnings, the offenders shall be punished with a fine of 10,000 yuan or less, and if the circumstances are serious, they shall be ordered to suspend business for rectification, and their business licences shall be revoked: (1) producing or selling commodities failing to meet the requirements for the protection of personal and property safety; (2) mixing adulterations into their commodities, or passing fake commodities off as genuine ones, or passing defective commodities off as good ones, or passing substandard commodities off as standard ones; (3) producing commodities which have been formally declared by the State to be eliminated, or selling commodities no longer effective or deteriorated; (4) forging the origin of commodities, forging or counterfeiting the names and addresses of other factories, and forging or counterfeiting the authentication marks or famous-and-excellent-product marks; (5) selling commodities not inspected or quarantined against the requirement therefore, or forging the result of inspection or quarantine; (6) making false or misleading propaganda about their commodities or services; (7) deliberately delaying or unreasonably refusing consumers’ demand for repair, remanufacture, replacement, return of goods, makeup for the short commodities, refundment of payment for goods or services, or compensations for losses; (8) violating human dignity or personal freedom of consumers; (9) other circumstances wherein punishment shall be given for infringement of consumer rights and interests as stipulated by laws or regulations. Article 51 Any business operator who is not satisfied with the decision on punishment may apply to the organ at the next higher level for reconsideration within 15 days from the date of receipt of the decision; and the person who is not satisfied with the reconsideration decision may bring a lawsuit in the people’s court within 15 days from the date of receipt of the reconsideration decision; or he may take legal proceedings directly in the people’s court. Article 52 Anyone who, by means of violence or threats, hinders functionaries of the administrative departments concerned from performing their duties according to law, shall be investigated for criminal responsibility according to law; and those who refuse or hinder functionaries of the administrative departments concerned from performing their duties according to law, without resorting to violence or threats, shall be punished by public security organs in accordance with the stipulations of the Regulations of the People’s Republic of China on the Administrative Penalties for Public Security. Article 53 Any functionary of the State organs, who neglects his duties or shields any business operator guilty of infringement of the legitimate rights and interests of consumers, shall be given administrative sanctions by the unit he belongs to, or by an organ at a higher level; if the circumstances are serious enough to constitute a crime, he shall be investigated for criminal responsibility according to law. Chapter VIII Supplementary Provisions Article 54 The present Law shall be applicable mutatis mutandis to peasants’ purchase or application of means of production used directly in agricultural production. Article 55 The present Law shall go into effect as of January 1, 1994.

CERTIFIED PUBLIC ACCOUNTANTS LAW

Law of the People’s Republic of China on Certified Public Accountants



	(Adopted at the 4th Meeting of the Standing Committee of the Eighth National People’s Congress and promulgated by Order No.13 of the President of the People’s Republic of China on October 31, 1993) Contents Chapter I General Provisions Chapter II Examination and Registration Chapter III Business Scope and Rules Chapter IV Public Accounting Firm Chapter V Institute of Certified Public Accountants Chapter VI Legal Liability Chapter VII Supplementary Provisions Chapter I General Provisions Article 1 This Law is formulated in order to bring into play certified public accountants’ role of attestation and service in social economic activities, strengthen administration of affairs of certified public accountants, protect public interests and the lawful rights and interests of investors, and promote the healthy development of the socialist market economy. Article 2 A certified public accountant is a professional who has obtained the certificate of certified public accountant according to law and is commissioned to offer auditing, accounting consultancy and other accounting services. Article 3 A public accounting firm is an organization which is established according to law and undertakes to provide professional services of certified public accountants. A certified public accountant who provides services shall join a public accounting firm. Article 4 The institute of certified public accountants is a public organization composed of certified public accountants. The Chinese Institute of Certified Public Accountants is the national organization of certified public accountants and institutes of certified public accountants in provinces, autonomous regions and municipalities directly under the Central Government are local organizations of certified public accountants. Article 5 The financial department under the State Council and financial departments of the people’s governments of provinces, autonomous regions and municipalities directly under the Central Government shall supervise and guide the activities of certified public accountants, public accounting firms and institutes of certified public accountants according to law. Article 6 Certified public accountants and public accounting firms in performance of services must abide by the law and administrative rules and regulations. Certified public accountants and public accounting firms shall carry out their business independently and fairly according to law and shall be protected by law. Chapter II Examination and Registration Article 7 The State shall adopt a unified national examination system for certified public accountants. The measures for the unified national examination shall be formulated by the financial department under the State Council and such examination shall be organized and conducted by the Chinese Institute of Certified Public Accountants. Article 8 Chinese citizens who have graduated from colleges or universities or who have earned the professional post_title of accountant or an intermediate or higher professional post_title in a relevant field of study may apply for attendance at a unified national examination for certified public accountants. Those who have earned the professional post_title of accountant or senior professional post_titles in a relevant field of study may be exempted from examination in certain subjects. Article 9 Whoever has passed the unified national examination for certified public accountants and has engaged in auditing business for more than two years may apply to the institute of certified public accountants of the province, autonomous region or municipality directly under the Central Government for registration. Except the situations specified in Article 10 of this Law, the institute of certified public accountants that has received the application shall permit the applicant to register. Article 10 If the applicant is involved in any of the following circumstances, the institute of certified public accountants that has received the application shall not permit the applicant to register: (1) if the applicant does not have the full capacity for civil conduct; (2) if the applicant was punished for a crime and the period between the date of completing the criminal punishment and the date of application for registration is less than five years; (3) if the applicant was subjected to an administrative sanction, or removed from office or a more serious sanction, due to grave mistakes in financial, accounting, auditing, enterprise management or other economic activities, and the period between the date of the decision for such punishment or sanction and the date of application for registration is less than two years; (4) if the applicant was punished with the revocation of the certificate of certified public accountant, and the period between the date of the decision for such punishment and the date of application for registration is less than five years; or (5) other circumstances under which registration shall not be approved as stipulated by the financial department of the State Council. Article 11 The institute of certified public accountants shall submit the name list of applicants whose applications are approved to the financial department of the State Council for the record. If the financial department of the State Council finds any registration approved by an institute of certified public accountants to be inconsistent with the provisions of this Law, it shall notify the relevant institute of certified public accountants to cancel the registration. If an institute of certified public accountants decides not to approve the registration of an applicant in accordance with Article 10 of this Law, it shall notify the applicant in writing within 15 days after the decision is made. If the applicant disagrees with the decision, he or she may, within 15 days after receiving the notification, apply to the financial department of the State Council or the financial department of the people’s government of the province, autonomous region or municipality directly under the Central Government for reconsideration. Article 12 The applicants who are permitted to register shall be granted by the institute of certified public accountants an unified certificate for certified public accountants issued by the financial department of the State Council. Article 13 If anyone who has acquired the certificate of a certified public accountant is involved in any of the following circumstances besides the one stipulated in the first paragraph of Article 11 of this Law, the institute of certified public accountants that approved the registration shall cancel the registration and revoke the certificate for certified public accountant: (1) having completely lost the capacity for civil conduct; (2) being under punishment for a crime; (3) being under an administrative sanction, or removed from office, or a more serious sanction due to grave mistakes in financial, accounting, auditing, enterprise management or other economic activities; or (4) having stopped, of his or her own accord, serving as a certified public accountant for one year or more. If the person concerned disagrees with the cancellation of registration, he or she may, within 15 days from the date of receiving the notification about the cancellation of registration or the revocation of the certificate for certified public accountant, apply for reconsideration to the financial department of the State Council or the financial department of the people’s government of the province, autonomous region or municipality directly under the Central Government. Persons whose registration has been cancelled in accordance with the provisions of the first paragraph may apply for registration anew, but the provisions of Article 9 and Article 10 of this Law must be complied with. Chapter III Business Scope and Rules Article 14 Certified public accountants shall undertake the following audit services: (1) examining the accounting statements of enterprises and producing audit reports; (2) verifying the capital of enterprises and producing capital verification reports; (3) dealing with audit services in matters of merger, division or liquidation of enterprises and producing relevant reports; and (4) other audit services stipulated by relevant laws and administrative rules and regulations. The reports produced by certified public accountants engaged in audit services according to law shall be authentic. Article 15 Certified public accountants may undertake accounting consultancy and accounting services. Article 16 All professional engagements to be undertaken by certified public accountants shall be accepted by the public accounting firm to which they belong and which shall sign engagement contracts with the clients. The public accounting firm shall assume civil liabilities for the services provided by its certified public accountants in accordance with the provisions of the preceding paragraph. Article 17 When providing services, certified public accountants may, where necessary, consult the relevant accounting materials, documents and check the business site and facilities of the client and require that the client provide other necessary assistance. Article 18 If there is an interest between a certified public accountant and a client, the certified public accountant shall withdraw; and the client shall have the right to demand that he or she withdraw. Article 19 Certified public accountants shall have the obligation to keep their clients’ trade secrets they come to know in carrying out their business. Article 20 In carrying out their audit services, certified public accountants may, under any of the following circumstances, refuse to produce a report to their clients: (1) The client indicates that they should provide untruthful or improper verification; (2) The client intentionally refuses to provide relevant accounting materials and documents; or (3) Due to other unreasonable requirements from the client, the report to be produced by certified public accountants can not provide a correct account of the important items of the financial accounting. Article 21 The certified public accountants must, in carrying out audit services, produce audit reports in accordance with the audit procedures set in the professional standards and rules. When preparing reports in the course of carrying out audit services, certified public accountants may not commit any of the following acts: (1) to refrain from pointing out while clearly knowing that the client’s processing of the important items of the financial accounting contravenes the relevant provisions of the State; (2) to conceal facts or produce an untruthful report while clearly knowing that the client’s processing of the financial accounting will directly impair the interests of the users of the report or other interested parties; (3) to refrain from pointing out while clearly knowing that the client’s processing of the financial accounting may substantially mislead the users of the report or other interested parties; or (4) to refrain from pointing out while clearly knowing that the important items of the client’s accounting statements contain other false information. Where certified public accountants ought to know the acts of their clients specified above in accordance with the professional standards and rules, the provisions of the preceding paragraph shall apply. Article 22 Certified public accountants shall not commit any of the following acts: (1) in the course of carrying out audit services, to buy or sell stocks or debentures of the institutions audited or purchase other property of institutions or individuals audited during the period such acts are prohibited as prescribed by the laws and administrative rules and regulations; (2) to ask for or accept remuneration or other forms of payment in cash or in kind in addition to what is agreed upon with the client in a contract, or seek other unlawful interests by taking advantage of their services; (3) to undertake commission to dun debts; (4) to allow others to carry out services in the name of the certified public accountant; (5) to work simultaneously at two or more public accounting firms; (6) to advertise their qualifications to solicit business; or (7) other acts in violation of the laws or administrative rules and regulations. Chapter IV Public Accounting Firm Article 23 A public accounting firm may be established by certified public accountants in partnership. The obligations of a public accounting firm in partnership shall be borne by the partners with their own property according to the proportion of their respective capital contributions or to their agreement. The partners shall bear joint liabilities as to the obligations of the public accounting firm. Article 24 A public accounting firm conforming to the following requirements may be a legal person with limited liabilities: (1) having a registered capital of no less than 300,000 yuan; (2) employing a certain number of full-time professionals, among whom there must be at least five certified public accountants; and (3) the business scope and other requirements as stipulated by the financial department of the State Council. Public accounting firms with limited liabilities shall bear obligations with their total assets. Article 25 The establishment of a public accounting firm shall be subjected to the approval of the financial department of the State Council, or the financial department of the people’s government of the province, autonomous region or municipality directly under the Central Government. To apply for establishment of a public accounting firm, the applicant shall submit to the examining and approving authorities the following documents: (1) an application; (2) the name, institutional structure and premises of the public accounting firm; (3) the articles of association of the public accounting firm, and the agreement of partnership if there is any; (4) the name list, resumes and relevant certificates of the certified public accountants; (5) the names, resumes and relevant certificates of the leading persons and partners of the public accounting firm; (6) the certificate of capital contributions of the public accounting firm with limited liabilities; and (7) other documents required by the examining and approving authorities. Article 26 The examining and approving authorities shall decide whether to approve or not within 30 days from the date of receiving the documents of application. Public accounting firms approved by the financial departments of the people’s governments of provinces, autonomous regions or municipalities directly under the Central Government shall be filed with the financial department of the State Council for the record. If the financial department of the State Council finds the approval to be inappropriate, it shall, within 30 days from the date of receiving the report, notify the original examining and approving authorities to review the case. Article 27 Establishment of a branch of a public accounting firm shall be subjected to the approval of the financial department of the people’s government of the province, autonomous region or municipality directly under the Central Government where the branch is to be located. Article 28 Public accounting firms shall pay taxes according to law. Public accounting firms shall set up a professional risk fund and undertake professional insurance as prescribed by the financial department of the State Council. Article 29 When receiving business, public accounting firms shall not be limited by administrative regions or trades, except as otherwise provided by the laws, administrative rules and regulations. Article 30 No unit or individual shall interfere in the services entrusted by the clients to public accounting firms. Article 31 The provisions of Articles 18 to 21 of this Law shall be applicable to public accounting firms. Article 32 Public accounting firms shall not commit any of the acts listed in Items 1 to 4, Item 6 and Item 7 of Article 22 of this Law. Chapter V Institute of Certified Public Accountants Article 33 A certified public accountant shall join an institute of certified public accountants. Article 34 The Articles of Association of the Chinese Institute of Certified Public Accountants shall be formulated by the national congress of the members of the Institute and filed with the financial department of the State Council for the record. The articles of association of the institutes of certified public accountants of provinces, autonomous regions or municipalities directly under the Central Government shall be formulated by the congresses of the members of the institutes and filed with the financial departments of the people’s governments of the provinces, autonomous regions or municipalities directly under the Central Government for the record. Article 35 The Chinese Institute of Certified Public Accountants shall draw up professional standards and rules for certified public accountants according to law and implement them after obtaining approval from the financial department of the State Council. Article 36 The institutes of certified public accountants shall support the certified public accountants in conducting their services according to law, safeguard their legitimate rights and interests and convey their opinions and suggestions to the relevant authorities. Article 37 The institutes of certified public accountants shall carry out annual inspection of the qualifications and professional services of certified public accountants. Article 38 The institutes of certified public accountants shall acquire the status of body corporate according to law. Chapter VI Legal Liability Article 39 If a public accounting firm violates the provisions of Article 20 or Article 21 of this Law, the financial department of the people’s government at or above the provincial level shall give a warning to the firm, confiscate its illegal income and may concurrently impose a fine of not less than one time, but not more than five times the value of the illegal income. If the circumstances are serious, the financial department of the people’s government at or above the provincial level may also suspend its business operation or revoke its business licence. If a certified public accountant violates the provisions of Article 20 or Article 21 of this Law, the financial department of the people’s government at or above the provincial level shall give a warning to the accountant. If the circumstances are serious, the financial department of the people’s government at or above the provincial level may have the accountant suspend the carrying out of services or revoke the certificate of the certified public accountant. A public accounting firm or a certified public accountant, that, in violation of the provisions of Article 20 or Article 21 of this Law, intentionally produces untruthful audit reports or capital verification reports shall, if the case constitutes a crime, be investigated for criminal responsibilities according to law. Article 40 If a unit undertakes the services defined for certified public accountants under Article 14 of this Law without prior approval, the financial department of the people’s government at or above the provincial level shall order the unit to stop its illegal activities, confiscate its illegal income and may concurrently impose a fine of not less than one time, but not more than five times the value of the illegal income. Article 41 If the party concerned disagrees with the decision on administrative sanctions, it may, within 15 days from the date of receiving the notification of the decision on sanctions, apply for reconsideration to the organ at the next higher level than the organ that made the decision on sanction. The party concerned may also, within 15 days from the date of receiving the notification of the decision on sanction, directly bring a suit before a people’s court. The organ giving reconsideration shall make a decision within 60 days from the date of receiving the application for reconsideration. If the party concerned disagrees with the decision made after reconsideration, it may bring a suit before a people’s court within 15 days from the date of receiving the decision. If the organ giving the reconsideration fails to make a decision within the time limit, the party concerned may bring a suit before a people’s court within 15 days from the expiration of the time limit for reconsideration. If the party concerned neither applies for reconsideration within the time limit, nor brings a suit before a people’s court, nor complies with the decision on sanction, the organ making the decision may apply to the people’s court for compulsory execution. Article 42 If a public accounting firm violates the provisions of this Law and causes losses to its client or other interested parties, it shall bear the liability for compensation according to law. Chapter VII Supplementary Provisions Article 43 A certified public auditor working in an audit firm, who has been recognized as qualified for a certified public accountant, may carry out the services provided by this Law. Measures for recognition of qualifications, and for supervision, guidance and administration of such auditors shall be formulated separately by the State Council. Article 44 As to foreigners who apply for participation in the unified national examination for Chinese certified public accountants and for registration as certified public accountants, the matter shall be dealt with on a reciprocal basis. Foreign public accounting firms that wish to establish a permanent representative office within the territory of China must apply to the financial department of the State Council for approval. A cooperative public accounting firm to be jointly sponsored by foreign and Chinese public accounting firms shall be subject to the examination and consent of the department under the State Council in charge of foreign economic relations and trade or a department authorized by the State Council and of a people’s government at the provincial level, before the matter is reported to the financial department of the State Council for approval. Apart from what is stipulated in the preceding paragraph, if a foreign public accounting firm wishes to conduct relevant business within the territory of China on a temporary basis, it must apply to the financial department of the people’s government of the relevant province, autonomous region and municipality directly under the Central Government for approval. Article 45 The State Council may formulate regulations for implementation in accordance with this Law. Article 46 This Law shall go into effect as of January 1, 1994. The Regulations of the People’s Republic of China on Chinese Certified Public Accountants promulgated by the State Council on July 3, 1986 shall be annulled therefrom.

CIRCULAR OF THE STATE COUNCIL CONCERNING FURTHER STRICTLY CONTROLLING THE IMPORT AND EXPORT OF INDUSTRIAL CHEMICALS WHICH MAY BE USED TO PRODUCE CHEMICAL WEAPONS

Category	FOREIGN TRADE	Organ of Promulgation	The State Council	Status of Effect	In Force
Date of Promulgation	1994-01-10	Effective Date	1994-01-10

Circular of the State Council Concerning Further Strictly Controlling the Import and Export of Industrial Chemicals Which May Be Used to Produce Chemical Weapons

(January 10, 1994)

With a view to prohibiting completely and destroying thoroughly all the
chemical weapons, China has signed in January, 1993 the Convention on
Prohibiting the Development, Production, Stockpile and Use of Chemical
Weapons and Destruction of This Kind of Weapons. This circular is issued for
the purpose of further strengthening the administration over the production,
sales, import and export of industrial chemicals which may be used to produce
chemical weapons.

1. The Ministry of Chemical Industry shall be responsible for the unified
control of the import and export of the industrial chemicals which may be
used to produce chemical weapons, and the production technology and special
equipment for those chemicals.

2. It is imperative to control the export of chemicals listed in Annex A
and the production technology and special equipment for those chemicals.
Units concerned shall submit it to the Ministry of Chemical Industry for
examination and approval before they negotiate with foreign clients for
exporting the chemicals listed in Annex A or the production technology or
special equipment for those chemicals.

3. The export contract of the chemicals listed in the Annexes (Annex A
and Annex B, the same below), and the production technology and special
equipment for those chemicals, shall come into force upon examination and
approval by the Ministry of Chemical Industry.

4. Units other than the enterprises which are designated by the Ministry
of Chemical Industry through consultation with the Ministry of Foreign
Economic Relations and Trade (hereinafter referred to as designated
enterprises) may not engage in import or export of chemicals listed in the
Annexes or the production technology or special equipment for those
chemicals.

5. Designated enterprises shall submit to the Ministry of Chemical
Industry the letter of guarantee issued by import government or its trustee
that the import chemicals shall not be used to produce chemical weapons or
transit to the third country and apply to the Ministry of Foreign Economic
Relations and Trade for export license. The Customs shall release such goods
according to the export license. Designated enterprises shall also go through
other formalities in accordance with the relevant rules.

6. Where domestic chemical production or scientific research needs
chemicals listed in the Annexes, designated enterprises must submit an
application to the chemical industry department of the relevant province,
autonomous region or municipality directly under the central government or
relevant ministry or commission and provide for the explanation and
certificate of the products’ end use; after examination and approval, they
shall be submitted to the Ministry of Chemical Industry for approval. The
Ministry of Foreign Economic Relations and Trade shall issue the import
license based on written approval by the Ministry of Chemical Industry and
the Customs shall release in accordance with the import license.

The Ministry of Chemical Industry and the Ministry of Foreign Economic
Relations and Trade shall formulate specific administrative measures
according to this Circular and report to departments concerned in time on the
state of examination and approval of import and export of the chemicals
listed in the Annexes and the production technology and special equipment for
those chemicals.

In the event of any conflict between this Circular and other relevant
legislation promulgated by the State Council and departments concerned
before this Circular, this Circular shall prevail.

    Annex A  The Key Precursors of Chemical Weapons

Chinese Name                    English
Name                     CAS
Registry

                                                                    Number
(1) : -S-2-  (1) Amiton: O,O,-Diethyl S-[2-
  (diethylamino) ethyl] phos-
                          phorothiolate

and
corresponding alkylated (78-53-5)

or
protonated salts

(2)PFIB:1,1,3,3,3,- -2-    (2) PFIB: 1,1,3,3,3,-Pentafluo-

-1-                  ro-2-(triflouorl methyl)-1

-propene (382-21-8)

(3)BZ: -3- (3) BZ:3-Ouinuclidinyl

benzilate (6581-06-2)

(4)    (4) Chemicals, containing a
( )       phosphorus atom to which is
,      bonded one methyl, ethyl or
          propyl(normal or iso) group
: : -S-   but not further carbon atoms
                        Exemption:
Fonofos: o-Ethyl

S-phenyl
ethylphosphono thi-

olothionate
(944-22-9)

(5) ( )   (5) N,N-Dialkyl(Me,Et,n-Pr
                    or
i-Pr)phosphoramidic

dihalides

(6) ( )   (6) Dialkyl(Me,Et,n-Pr or i-
(      Pr)N,N-dialkyl(Me,Et,n-Pr
)
or i-Pr)-phosphoramidates

(7)                    (7) Arsenic
trichloride             (7784-34-1)

(8)2,2- -2- (8) 2,2-Diphenyl-2-hydroxy-

acetic
acid
(76-93-7)

(9) -3- (9) Quinuclidine-3-ol
(1619-34-7)

(10) ( )  (10) N,N-Dialkyl(Me,Et,n-
-2-      Pr or i-Pr)aminoethyl-2-

chlorides
and correspond-

ing
protonated salts

(11) ( )  (11) N,N-Dialkyl(Me,Et,n-Pr
-2-        or i-Pr)aminoethane-2-ols
:      and corresponding proto-
                            nated
salts

Exemptions: N,N-Dimethr-

laminoethanol
and corres-

ponding
protonated salts (108-01-0)

N,N-Diethylaminoethanol
and

corresponding
protonated

salts (100-37-8)

(12) ( )  (12) N,N-Dialkyl(Me,Et,n-Pr
-2-      or i-Pr) aminoethane-2-

thiols
and correponding

protonated
salts

(13) : (2- ) (13) Thiodiglycol: Bis(2-hydrox-

yethyl)
sulfide (111-48-8)

(14) :3,3- –    (14) pinacolyl alcohol: 3,3-
2-                             Dimethylbutane-2-ol              (464-07-3)

Annex B The Chemicals of Chemical Weapons

Chinese Name English Name CAS
Registry

                                                                    Number

(1) :              (1)Phosgene: Carbonyl dichloride    (75-44-5)
(2)                     (2)Cyanogen
chloride                (506-77-4)
(3)                     (3)Hydrogen
cyanide                 (74-90-8)
(4) :        (4)Chloropierin: Trichloronitro-    (76-06-2)

                                methane

(5)                     (5)Phosphorus
oxychloride           (10025-87-3)
(6)                   (6)Phosphorus
trichloride           (7719-12-2)
(7)                   (7)Phosphorus
pentachloride         (10026-13-8)
(8)               (8)Trimethyl phosphite              (121-45-9)
(9)               (9)Triethyl phosphite
(122-52-1)
(10)              (10)Dimethyl phosphite              (868-85-9)
(11)              (11)Diethyl phosphite
(762-04-9)
(12)                  (12)Sulfur monochloride
(10025-67-9)
(13)                  (13)Sulfur dichloride
(10545-99-0)
(14)                  (14)Thionyl chloride                (7719-09-7)
(15)              (15)Ethyldiethanolamine
(139-87-7)
(16)              (16)Methyldiethanolamine            (105-59-9)
(17)                  (17)Triethanoiamine
(102-71-6)

PROTECTION OF THE RIGHTS AND INTERESTS OF CONSUMERS

Law of the PRC on the Protection of the Rights and Interests of Consumers

CHAPTER I GENERAL PRINCIPLES

CHAPTER II CONSUMER RIGHTS

CHAPTER III OBLIGATIONS OF BUSINESS OPERATORS

CHAPTER IV STATE PROTECTION OF THE LEGAL RIGHTS AND INTERESTS OF CONSUMERS

CHAPTER V CONSUMER ORGANIZATIONS

CHAPTER VI DISPUTE RESOLUTION

CHAPTER VII LEGAL LIABILITY

CHAPTER VIII SUPPLEMENTARY PRINCIPLES

Article 1 This Law is formulated in order to protect the legal rights and interests of consumers, to maintain social and economic order and
to promote the healthy development of the socialist market economy.

Article 2 The rights and interests of consumers when purchasing or using commodities or receiving services as consumer needs for daily use
shall be protected by this Law. Rights and interests covered by this Law shall be protected by other relevant laws and regulations.

Article 3 This Law shall be observed by business operators in the provision of commodities produced or sold and in the provision of consumer
services. Where matters are not covered by this Law, other relevant laws and regulations shall be observed.

Article 4 Transactions between business operators and consumers shall be conducted according to the principles of voluntary participation,
equality, fairness, honesty and trustworthiness.

Article 5 The State shall protect consumers’ legal rights and interests against infringement.

The State shall adopt measures to protect consumers in the legal exercise of their rights and shall safeguard consumers’ legal rights
and interests.

Article 6 The whole society shall bear responsibility for the protection of consumers’ legal rights and interests.

The State shall encourage and support social control by any organization or individual of acts harmful to consumers’ legal rights
and interests.

The mass media shall improve propaganda on the safeguarding of consumers’ legal rights and interests and shall use public opinion
to control acts harmful to consumers’ legal rights and interests.

Article 7 In the purchase or use of a commodity or receipt of a service, a consumer shall have the right to the safety of person and property
guaranteed.

A consumer shall have the right to require that commodities and services provided by a business operator meet with requirements for
the safety of person and property.

Article 8 A consumer shall have the right to knowledge of the true facts concerning commodities purchased and used or services received.

A consumer shall have the right to require relevant information of a business operator providing commodities on price, place of origin,
producer, usage, functions, specifications, grade, main ingredients, date of production, date of expiry, certificate of inspection,
operation manual and after-sale service, or of contents, specifications and fees of services in respect of commodities or services
as the situation requires.

Article 9 A consumer shall have the right to free choice in purchasing commodities or services.

A consumer shall have the right to freely choose a business operator providing commodities or services, types of commodity and modes
of service and whether to purchase a commodity or receive a service.

A consumer shall have the right to compare, appraise and select when freely choosing a commodity or service.

Article 10 A consumer shall have the right to fair dealing.

A consumer shall have the right to fair terms of trade and conditions such as quality guarantee, reasonable price, accurate measures,
etc, when purchasing a commodity or receiving a service, and shall have the right to reject coercive transactions by business operators.

Article 11 A consumer shall have the right to obtain compensation in accordance with the law where harm is inflicted upon their person or property
as a result of the purchase or use of a commodity or the receipt of a service.

Article 12 Consumers shall, in accordance with the law, have the right to establish social organizations ensuring their legal rights and interests.

Article 13 A consumer shall have the right to obtain information relating to consumption and the protection of the rights and interests of consumers.

A consumer shall strive to master all of the necessary information and the ability to use a commodity or service, shall use commodities
properly and shall increase awareness of self protection.

Article 14 A consumer shall, when purchasing or using a commodity or receiving a service, have the right to have human dignity, national customs
and traditions respected.

Article 15 A consumer shall have the right to supervise the protection of consumers’ rights and interests in work related to commodities and
services.

A consumer shall have the right to report or complain of acts infringing upon the rights and interests of consumers, and unlawful
or derelict acts of State authorities and personnel in the course of protecting the rights and interests of consumers. A consumer
shall have the right to criticise and make suggestions for the protection of the rights and interests of consumers.

CHAPTER III OBLIGATIONS OF BUSINESS OPERATORS

Article 16 A business operator providing a commodity or service to a consumer shall perform obligations in accordance with the Product Quality
Law of the People’s Republic of China and other relevant laws and regulations.

Where an agreement exists between a consumer and a business operator, obligations shall be carried out in accordance with that agreement.
An agreement between the parties concerned shall not, however, be in contravention of laws and regulations.

Article 17 A business operator shall listen to and take account of suggestions regarding commodities and services provided by it and shall be
subject to supervision by consumers.

Article 18 A business operator shall ensure that commodities and services provided by it meet with the requirement for the safeguard of the
person and property of the consumer. Where a commodity or a service may jeopardise safety of person or property of the consumer,
it shall make a true statement and clear warning explaining and indicating correct methods for the use of such a commodity or receipt
of such a service and preventative measures against such an occurrence.

A business operator which finds a commodity or a service provided by it to have a serious defect which may cause harm to the safety
of person or property of the consumer, even where such a commodity or a service is used correctly, must immediately make a report
to the relevant authorities, inform consumers and adopt preventative measures against such occurrence.

Article 19 A business operator shall provide consumers with true information concerning commodities and shall not conduct false advertising.

A business operator shall provide true and clear answers to questions raised by consumers concerning the quality and use of commodities
or services provided by it, and other related issues.

Retailers shall clearly mark prices on the commodities provided by them.

Article 20 A business operator shall clearly indicate its true name and trade.

A business operator leasing counters or venues shall clearly indicate its true name and trade.

Article 21 A business operator providing commodities or services shall issue a purchase or service voucher to consumers in accordance with relevant
State regulations or commercial practices. A business operator must issue a purchase or service voucher where requested to do so
by a consumer.

Article 22 A business operator shall ensure that the commodities or services which it provides possess the quality, functions, usages and dates
of expiry that they should have during the normal use of such commodities or receipt of such services, except where a consumer is
already aware of the existence of defects before purchasing such commodities or receiving such services.

A business operator indicating the quality condition of a commodity or a service by way of advertisement, product description, physical
example or other means must ensure that the actual quality of the commodity or service provided by it is consistent with the indicated
quality condition.

Article 23 A business operator which bears responsibility for guaranteed repair, replacement and return or other liability in accordance with
State regulations or an agreement with a consumer in providing a commodity or a service must carry out such responsibilities in accordance
with State regulations or the agreement and shall not be permitted to deliberately procrastinate or refuse to do so without reason.

Article 24 A business operator shall not be permitted to set unreasonable or unfair terms for consumers or alleviate or release itself from
civil liability for harming the legal rights and interests of consumers by means of standard contracts, circulars, announcements,
shop notices, etc.

Where standard contracts, circulars, announcements, shop notices, etc, contain contents as listed in the preceding paragraph, the
contents of such standard contracts, circulars, announcements and shop notices, etc, shall be invalid.

Article 25 A business operator shall not insult or slander consumers. A business operator may not search the body of a consumer or articles
carried by a consumer and shall not infringe upon the personal freedom of a consumer.

CHAPTER IV STATE PROTECTION OF THE LEGAL RIGHTS AND INTERESTS OF CONSUMERS

Article 26 The State must, when formulating laws, statutory regulations and policies concerning the rights and interests of consumers, listen
to and take into account the views and requirements of consumers.

Article 27 People’s Governments at all levels shall strengthen their leadership in organization, coordination and supervision of the work of
the relevant administrative departments for the protection of the legal rights and interests of consumers.

People’s Governments at all levels shall improve supervision in order to prevent acts harmful to the safety of the person or property
of consumers and to promptly stop acts which are harmful to the safety of the person and property of consumers.

Article 28 The administrations for industry and commerce and other relevant administrative departments of the People’s Governments at all levels
must adopt measures, in accordance with laws and statutory regulations and within their respective powers and functions, to protect
the legal rights and interests of consumers.

The relevant administrative departments must listen to the views of consumers and their social organizations on issues concerning
transactions, quality of commodities and services of business operators, and investigate and handle such issues in a timely manner.

Article 29 The relevant State authorities shall penalize, in accordance with laws and statutory regulations, business operators for illegal
and criminal acts that infringe upon the legal rights and interests of consumers during the provision of commodities and services.

Article 30 The People’s Courts shall adopt measures to facilitate the institution of legal proceedings by consumers. Disputes over the rights
and interests of consumers that meet the conditions for instituting an action under the Code of Civil Procedure of the People’s Republic
of China must be accepted and promptly heard.

Article 31 Consumer associations and other consumer organizations shall be social organizations that are established in accordance with the
laws that carry out social supervision of commodities and services and protect the legal rights and interests of consumers.

Article 32 A consumer association shall exercise the following duties and functions:

(1) provide information and advice services for consumers;

(2) participate in the supervision and inspection of commodities and services by the relevant administrative departments;

(3) report to, inquire of or make suggestions to relevant administrative departments on issues concerning the legal rights and interests
of consumers;

(4) accept complaints by consumers and conduct investigation into and mediation of such complaints;

(5) where a complaint involves issues concerning the quality of commodities and services, it may require an appraisal department to
appraise the quality. Such appraisal department shall advise the appraisal findings;

(6) assist aggrieved consumers in instituting legal proceedings against acts which harm the legal rights and interests of consumers;
and

(7) reveal and criticise acts harmful to the legal rights and interests of consumers through the mass media.

People’s Governments at all levels shall support the consumer associations in the implementation of their duties and functions.

Article 33 Consumer organizations shall not be permitted to engage in commodity business or profit-making service provision and shall not be
permitted to recommend commodities and services to the public for the purpose of making a profit.

Article 34 Consumers may resolve disputes with business operators over their rights and interests in the following ways:

(1) negotiate a settlement with the business operator;

(2) request a consumer association to mediate;

(3) complain to the relevant administrative department;

(4) apply to an arbitral body for arbitration in accordance with the arbitration agreement reached with the business operator; or

(5) institute legal proceedings in a People’s Court.

Article 35 A consumer whose legal rights and interests are harmed during the purchase or use of a commodity may demand compensation from the
seller. Where the responsibility lies with the producer or another seller that provides the commodities to the seller, the seller,
after settling compensation, shall have the right to recover such compensation from that producer or that other seller.

A consumer or other injured party whose person or property is harmed due to a commodity defect may demand compensation from the seller
or may also demand compensation from the producer. Where the responsibility lies with the producer, the seller, after settling compensation,
shall have the right to recover from the producer. Where the responsibility lies with the seller, the producer, after settling compensation,
shall have the right to recover such compensation from the seller.

A consumer whose legal rights and interests are harmed during the receipt of a service may demand compensation from the provider of
that service.

Article 36 When the legal rights and interests of a consumer are harmed during the purchase and use of a commodity or receipt of a service and
the original enterprise has divided or merged, the consumer may demand compensation from the enterprise that takes over the rights
and obligations of the original enterprise.

Article 37 Where an illegal business operator harms the legal rights and interests of a consumer in providing commodities or services by using
another party’s business licence, the consumer may demand compensation from such a business operator or may demand compensation from
the holder of the business licence.

Article 38 A consumer whose legal rights and interests are harmed during the purchase of commodities or receipt of services at a trade fair
or at a leased counter may demand compensation from the seller of the commodities or the provider of the services. After the trade
fair has finished or the lease of the counter has expired, the consumer may also demand compensation from the organizer of the trade
fair or the lessor of the counter. After the organizer of the trade fair or the lessor of the counter has settled the compensation,
the organizer or the lessor shall have the right to recover such compensation from the seller of the commodities or the provider
of the services.

Article 39 A consumer whose legal rights and interests are harmed by a business operator that provides a commodity or a service with the use
of false advertising may demand compensation from the business operator. Where an advertising operator disseminates a false advertisement,
a consumer shall have the right to request the administrative department in charge to impose a penalty. If such an advertising operator
fails to provide the true name and address of the business operator, that advertising operator shall bear liability for compensation.

Article 40 Except where otherwise provided by this Law, a business operator that provides commodities or services shall, in any of the following
circumstances, bear civil liability in accordance with the Product Quality Law of the People’s Republic of China and other relevant
laws and regulations:

(1) where a defect exists in a commodity;

(2) where a commodity does not possess functions it should possess, and this is not stated when the commodity is sold;

(3) where the commodity standards indicated on a commodity or on the package of such commodity are not met;

(4) where the quality condition indicated by way of commodity description or physical sample, etc, is not met;

(5) where commodities pronounced obsolete by formal State decrees are produced or have expired or deteriorated commodities are sold;

(6) where a commodity sold is not adequate in quantity;

(7) where the service items and charges are in violation of an agreement;

(8) where demands by a consumer for repair, redoing, replacement, return, making up the quantity of a commodity, refund of a commodity
purchase price or service fee or claims for compensation have been delayed deliberately or rejected without reason; or

(9) in other circumstances whereby the rights and interests of consumers, as provided by laws and regulations, are harmed.

Article 41 A business operator that causes bodily injuries to a consumer or other party in providing a commodity or a service must pay expenses
such as medical treatment expenses and nursing expenses during treatment period and income lost due to absence from work. Where
physical disability is caused, expenses such as assistance expenses for the tools of disabled people, living subsidies, disability
compensation funds and living expenses necessary for the dependents of the disabled must also be paid. Where a criminal offence is
constituted, criminal liability shall be pursued in accordance with the Law.

Article 42 A business operator that causes the death of a consumer or other party in providing a commodity or a service shall pay expenses such
as funeral costs, death compensation funds and the living expenses necessary for the persons that depended on the victim while alive.
Where a criminal offence is constituted, criminal liability shall be pursued in accordance with the law.

Article 43 A business operator found to have violated Article 25 of this Law by violating the human dignity or personal freedom of a consumer
must stop the violation, restore the reputation of the consumer, eliminate the effects of the violation and offer an apology and
compensation for any losses incurred.

Article 44 A business operator that causes damage to the property of a consumer in providing a commodity or a service must assume civil liability
by means of repair, redoing, replacement, return of goods, making up the quantity of a commodity, refund of payment for the commodity
and the service fee or compensation for losses, at the request of the consumer. Where the consumer and business operator have a
separate agreement, such agreement shall be implemented.

Article 45 For a commodity of which the guaranteed repair, replacement and return are specified by the State or by an agreement between a business
operator and a consumer, the business operator must be responsible for the repair, replacement or return. Where a commodity still
cannot be used properly after being repaired twice within the guaranteed maintenance period, the business operator must be responsible
for replacement or return.

Where a consumer requires a business operator to repair, replace or return a large commodity of which the repair, replacement or return
is guaranteed, the business operator must bear reasonable expenses such as freight.

Article 46 A business operator that provides a commodity by mail order must provide such commodity in accordance with the agreement. If the
business operator fails to do so in accordance with the agreement, it must, at the request of the consumer, implement the agreement
or refund payment and bear reasonable expenses needed to be paid by the consumer.

Article 47 A business operator that provides a commodity or a service for advance payment must provide such service or commodity in accordance
with the agreement. If the business operator fails to do so in accordance with the agreement, the business operator must, at the
request of the consumer, implement the agreement or refund the advance payment and bear the interest on the advance payment and reasonable
expenses needed to be paid by the consumer.

Article 48 Where a consumer demands the return of a commodity that has been verified not to be up to standard by the relevant administrative
department in accordance with the law, the business operator must be responsible for the return of such commodity.

Article 49 A business operator that practices fraud in providing a commodity or a service must, at the request of the consumer, increase the
compensation for losses incurred by such consumer. The amount of the increase in compensation shall be the price of the commodity
purchased or the fee for the service received by the consumer.

Article 50 Where penalty imposing authorities and procedures are specified by the Product Quality Law of the Peoples’ Republic of China or any
other relevant laws and statutory regulations in any of the following circumstances involving a business operator, such laws and
statutory regulations shall be implemented. Where circumstances are not specified in laws and statutory regulations, the administrations
for industry and commerce shall order the matter to be rectified and may, depending on the circumstances, impose one or several of
the following penalties: issuance of a warning, confiscation of the illegal income and/or imposition of a fine of between one and
five times the amount of the illegal income; where no illegal income is obtained, a fine of less than RMB 10,000 yuan shall be imposed;
where the circumstances are serious, the business operator shall be ordered to cease business operation for reorganization and have
its business licence revoked:

(1) where a commodity produced or sold fails to meet the requirements for the protection and safety of person and property of the
consumer;

(2) where a commodity is adulterated or mixed with improper elements, a fake commodity is passed off as a genuine commodity, a commodity
of poor quality as a quality commodity or a sub-standard commodity is used in imitation of the standard commodity;

(3) where a commodity pronounced obsolete by formal State decrees is produced, or an expired or deteriorated commodity is sold;

(4) where the place of origin of a commodity is fabricated; the factory name or address of another party is fabricated or used without
authorization; quality marks such as certification marks, famous brand marks or marks of excellence are fabricated or used without
authorization;

(5) where a commodity subject to inspection or quarantine is sold without inspection or quarantine or where inspection or quarantine
results are falsified;

(6) where false and misleading advertising for a commodity or a service is carried out;

(7) where demands by a consumer for repair, redoing, replacement, return, making up the quantity of a commodity, refund of payment
for the commodity or service fee or compensation for losses incurred have been delayed deliberately or rejected without reason;

(8) where the human dignity or personal freedom of a consumer has been violated; or

(9) in other circumstances for which laws and regulations specify penalties for harming the rights and interests of consumers.

Article 51 A business operator that disagrees with a decision to impose an administrative penalty may, within fifteen (15) days of receiving
the penalty notice, apply to the authority at the next highest level for a review of the case. A business operator that disagrees
with the review decision may, within fifteen (15) days of receiving the review decision, file a suit in a People’s Court. Alternatively,
the business operator may also directly file a suit in a People’s Court.

Article 52 If a party, by violence or threat, obstructs the personnel of a relevant administrative department in carrying out their duties in
accordance with the law, criminal liability shall be pursued in accordance with the law. If a party, not by violence or threat,
obstructs the personnel of a relevant administrative department in carrying out their duties in accordance with the law, penalties
shall be imposed by the public security authorities in accordance with the Rules of the People’s Republic of China on the Public
Security Administration and Penalties.

Article 53 Personnel of government organs who neglect their duties or shelter business operators from acts harming the legal rights and interests
of consumers shall be subject to administrative penalties by their units or by the authority at the next highest level. Should the
action be serious enough to constitute a crime, criminal liability shall be pursued in accordance with the law.

CHAPTER VIII SUPPLEMENTARY PRINCIPLES

Article 54 The purchase and use by peasants of production materials directly used for agricultural purposes shall be handled with reference
to this Law.

Article 55 This law shall take effect from 1 January 1994.

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PROTECTION OF CONSUMER RIGHTS AND INTERESTS LAW

CERTIFIED PUBLIC ACCOUNTANTS LAW

CIRCULAR OF THE STATE COUNCIL CONCERNING FURTHER STRICTLY CONTROLLING THE IMPORT AND EXPORT OF INDUSTRIAL CHEMICALS WHICH MAY BE USED TO PRODUCE CHEMICAL WEAPONS

PROTECTION OF THE RIGHTS AND INTERESTS OF CONSUMERS

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